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7. 


/- 


THE 


NEGOTIABLE  INSTRUMENTS  LAW 


From  the  Draft  prepared  for  the  Commissioners  on  Uniformity 
OF  Laws,  and  Enacted  in  Alabama,  Arizona,  Colorado,  Con- 
necticut, District  of  Columbia,  Florida,  Idaho,  Illinois, 
Iowa,     Kansas,     Kentucky,     Louisiana,     Maryland, 
Massachusetts,    Michigan,    Missouri,     Montana, 
Nebraska,  Nevada,  New  Jersey,  New  Mexico, 
New  York,  North  Carolina,  North  Dakota, 
Ohio,    Oregon,    Pennsylvania,    Rhode 
Island,  Tennessee.  Utah,  Virginia, 
Washington,    West    Virginia, 
Wisconsin,    and    Wyoming. 


THE  FULL  TEXT  OF  THE  LAW  AS  ENACTED, 
WITH  COPIOUS  ANNOTATIONS. 

BY 

JOHN  J.  CRAWFORD, 

Of  the  New  York  Bar, 

BY  WHOM  THE  STATUTE  WAS   DRAWN. 


THIRD  EDITION. 


NEW  YORK: 
BAKBR,    VOOKHIS    AND    COMPANY. 

1908. 


Copyright,  1897, 
Bv  John  J.  Crawford. 

Copyright,  1902, 
By  John  J.  Crawford. 

Copyright,  1908, 
By  John  J.  Crawford. 


J.    B.    LVON    COMPANY 

PRtNTRKS    AND    BINDEUSr 

ALBANV.    N.    Y 


C^ 


f 


PllEFACE  TO  THIRD  EDITION. 


Since  the  second  edition  of  this  book  was  pubhshed  in 
1902,  the  Negotiable  Instruments  Law  has  been  enacted 
in  the  following  States,  viz. :     Alabama,  Arizona,  Idaho, 
Illinois,  Iowa,    Kansas,    Kentucky,    Louisiana,    Michigan, 
Missouri,  Montana,  Nebraska,  Nevada,  New  Jersey,  New 
Mexico,  Ohio,  West  Virginia  and  Wyoming.     In  all  but 
_  one  of  these,  the  language  of  the  Act  is  the  same  as  that 
i~  in  the  New  York  statute,  except  in  a  few  minor  and  unim- 
portant particulars.    The  Illinois  statute,  however,  contains 
i  some  provisions  materially  different.     These  consist  mainly 
;:of  proposed  amendments  submitted  to  the  Commissioners 
'rron  Uniformity  of  Laws  at  their  annual  meeting  in  1900, 
but  which  the  Commissioners,  by  a  unanimous  vote,  after 
a  full  report  from  a  committee  appointed  to  consider  the 
subject,  rejected  as  undesirable.     In  the  six  years  that  have 
elapsed    since   the   publication   of   the   second   edition,    the 
statute  has  been   applied  or  construed   in   more  than  two 
hundred  cases.     All  of  these  are  cited  in  the  present  edi- 
tion.    The  numbers  of  the  sections  vary  in  the  different 
States,  and  for  convenience  of  reference  a  table  of  corrc- 
sp(jnding  sections  has  been  added. 

John  J.  Crawford. 
30  Broad  Street,  New  York,  June  10,  1908. 

[iii] 


PREFACE  TO  SECOTO  EDITION. 


When  the  first  edition  of  this  book  was  pubhshed,  the 
Neg-otiable  Instruments  Law  had  been  passed  in  four  States, 
viz. :  New  York,  Connecticut,  Florida  and  Colorado.  In  the 
four  years  which  have  elapsed  since  then  it  has  been  enacted 
in  Massachusetts,  Rhode  Island,  Pennsylvania,  Maryland, 
Virginia,  North  Carolina,  Tennessee,  Wisconsin,  North 
Dakota,  Utah,  Oregon  and  Washington,  and  has  also  been 
adopted  by  Congress  as  the  law  of  the  District  of  Columbia. 
In  most  instances  the  law  has  been  passed  in  the  form  pro- 
posed by  the  Commissioners  on  Uniformity  of  Laws ;  but  in 
several  States  a  few  minor  changes  have  been  made.  These 
are  indicated  in  the  notes  to  this  edition.  I  have  also  en- 
deavored to  point  out  the  changes  made  by  the  law  in  the 
different  States,  and  have  added  to  the  notes  citations  to  the 
decisions  in  all  the  States  where  the  statute  is  now  in  force. 
It  is  somewhat  notable  that  so  few  cases  have  arisen  under 
the  Act.  The  reported  cases  number  only  about  a  half  dozen 
in  all ;  and  in  most  of  these  the  court  was  required  only  to 
apply  the  act,  and  not  to  construe  it.  Perhaps  nothing  could 
better  demonstrate  that  the  practical  working  of  the  law  has 
been  satisfactory.  As  in  the  previous  edition,  the  text  is 
that  of  the  New  York  Act.  For  the  information  of  the  pro- 
fession outside  of  New  York  it  may  be  stated  that  the 
hiatus  in  the  section  numbers  does  not  indicate  the  omission 
of  any  sections,  but  is  in  accordance  with  the  plan  adopted 
in  all  the  "  General  Laws  "  of  this  State. 

John  J.  Crawford. 

30  Broad  Street,  New  York,  February  i,  1902. 

[v] 


PREFACE  TO  FIRST  EDITION. 


In  1895  the  Conference  of  Commissioners  on  Uniformity 
of  Laws,  which  met  that  year  in  Detroit,  instructed  the 
Committee  on  Commercial  Law  to  have  prepared  a  codifi- 
cation of  the  law  relating  to  bills  and  notes.  The  matter 
was  referred  to  a  sub-committee  consisting  of  Lyman  D. 
Brewster  of  Connecticut,  Henry  C.  \\'ilcox  of  New  York 
and  Frank  Bergen  of  New  Jersey;  and  I  was  employed  by 
the  sub-committee  to  draw  the  proposed  law.  When  com- 
pleted, the  draft,  with  my  notes,  was  submitted  to  the  sub- 
committee, who  printed  it  and  sent  copies  to  each  member  of 
the  conference,  and  also  to  many  prominent  lawyers  and 
law  professors,  and  to  several  English  judges  and  lawyers, 
with  an  invitation  for  suggestions  and  criticisms.  The 
draft  was  submitted  to  the  conference  which  met  at  Sara- 
toga in  August,  1896;  and  the  Commissioners  who  were 
in  attendance,  being  twenty-seven  in  all.  and  representing 
fourteen  different  States,  went  over  it  section  by  section, 
and  made  some  amendments  therein,  most  of  which  were 
such  changes  in  the  existing  law  as  I  had  not  felt  at  liberty 
to  incorporate  into  the  original  draft.  The  draft  as  thus 
amended  was  adopted  by  the  conference;  and  in  such  form 
it  has  been  submitted  to  the  legislatures  of  many  of  the 
States.  It  has  been  passed  and  has  become  a  law  in  New 
York,  Connecticut.  Colorado  and  Florida.  T  am  informed 
that  the  Commissioners  on  I'niformity  of  Laws  will  make 
special  effort  to  hrivc  it  adopted  in  many  other  States  at  the 
next  session  of  their  legislatures. 

The  text  of  the  law  as  printed  in  this  edition  is  that  of 
the  New  York  statute.    This  is  precisely  the  same  as  that  of 

[vii] 


VUI  rUKFALl-:   TO   riRST   liDlTlON. 

the  draft  published  by  the  Coniniissioners  on  Uniformity  of 
Laws,  and  the  statute  as  passed  in  Connecticut,  Colorado 
and  Florida,  except  that  the  section  numbers  have  been 
changed,  and  section  headings  introduced,  to  conform  the 
statute  to  the  plan  adopted  by  the  Commissioners  of  Statu- 
tory Revision  in  their  revision  of  the  General  Laws,  and 
three  sections,  viz.,  330,  331  and  332,  relating  to  special 
matters  heretofore  embodied  in  other  New  York  statutes, 
have  been  added. 

In  the  course  of  the  passage  of  the  bill  through  the  New 
York  Legislature  a  number  of  errors  were  made  in  the  en- 
grossing and  were  not  detected  until  too  late  to  be  corrected. 
I  have  indicated  these  by  asterisks  and  foot-notes.  Probably 
none  of  them  are  of  such  a  character  as  to  efTect  the  mean- 
ing, since  they  are  so  obviously  mistakes. 

In  submitting,  this  edition  of  the  statute  to  the  public,  I 
embrace  this  my  first  opportunity  to  publicly  express  my  ap- 
preciation of  the  unvarying  courtesy  and  consideration 
shown  me  by  the  Commissioners  on  Uniformity  of  Laws, 
and  especially  by  those  composing  the  sub-committee  having 
the  preparation  of  the  bill  in  charge. 

John  J.  Crawford. 
30  Broad  Street,  New  York,  July  8,  1897. 


TABLE  OF  CORRESPONDING  SECTIONS. 


IX 


TABLE  OF  CORRESPOXDIXG  SECTIONS  OF  THE 

STATUTES. 


Commis- 

N. Y. 

sioner's 
draft.* 

Ariz. 

111. 

Kans. 

Md. 

Mich. 

Nebr. 

Ohio. 

R.I. 

Wis. 

1 
2 

190 
191 

189 
190 

1 

13 

1 

1 

1675 

'3487' 

2 

14 

2 

'isg' 

"siis" 

2 

1675 

3 

192 

3488 

191 

3 

15 

2 

190 

3178a 

3 

1675 

4 

193 

3489 

192 

4 

16 

2 

191 

3178b 

4 

1675 

5 

194 

3490 

193 

5 

17 

2 

192 

317SC 

5 

1675 

6 

195 

194 

6 

18 

2 

193 

3178d 

6 

1675 

7 

196 

3491 

195 

7 

19 

2 

194 

3178e 

7 

1675 

20 

1 

3304 

1 

8 

20 

3 

1 

3171 

9 

1675-1 

21 

2 

3305 

2 

9 

21 

4 

2 

3171a 

10 

1675-2 

22 

3 

3306 

3 

10 

22 

o 

3 

3171b 

11 

1675-3 

23 

4 

3307 

4 

11 

23 

6 

4 

3171c 

12 

1675-4 

24 

5 

3308 

5 

12 

24 

7 

5 

3171d 

13 

1675—5 

25 

6 

3309 

6 

13 

25 

8 

6 

3171e 

14 

1675-6 

26 

7 

3310 

7 

14 

26 

9 

7 

3171f 

15 

1675—7 

27 

8 

3311 

8 

15 

27 

10 

8 

3171g 

16 

1675-8 

28 

9 

3312 

9 

16 

28 

11 

9 

317  Ih 

17 

1675-y 

29 

10 

3313 

10 

17 

29 

12 

10 

3171i 

18 

1675-10 

30 

11 

3314 

11 

18 

30 

13 

11 

3171J 

19 

1675-11 

31 

12 

3315 

12 

19 

31 

14 

12 

3171k 

20 

1675-12 

32 

13 

3316 

13 

20 

32 

15 

13 

31711 

21 

1675-13 

33 

14 

3317 

14 

21 

33 

16 

14 

3171m 

22 

1675-14 

34 

15 

3318 

15 

22 

34 

17 

15 

317111 

23 

1675-15 

35 

16 

3319 

16 

23 

35 

18 

16 

31710 

24 

1675-16 

36 

17 

3320 

17 

24 

36 

19 

17 

3171p 

25 

1675-17 

37 

18 

3321 

18 

25 

37 

20 

18 

3171q 

26 

1675-18 

38 

19 

3322 

19 

26 

38 

21 

19 

3171r 

27 

1675-19 

39 

20 

3323 

20 

27 

39 

22 

20 

3171s 

'28 

1675-20 

40 

21 

3324 

21 

28 

40 

23 

21 

31711 

29 

1675-21 

41 

22 

3325 

22 

29 

41 

24 

22 

3171U 

30 

1675-22 

42 

23 

3326 

23 

30 

42 

25 

23 

3171V 

31 

1675-23 

50 

24 

3327 

24 

31 

43 

26 

24 

3171W 

32 

1675-50 

51 

25 

3328 

25 

32 

44 

27 

25 

3171X 

33 

1675-51 

52 

26 

3329 

26 

33 

45 

28 

26 

3l7ly 

34 

1675-52 

53 

27 

3330 

27 

34 

46 

29 

27 

3171Z 

35 

1675-53 

54 

28 

3331 

28 

35 

47 

30 

28 

3172 

36 

1675-54 

55 

29 

3332 

29 

36 

48 

31 

29 

3172a 

37 

1675-55 

60 

30 

3333 

30 

37 

49 

32 

30 

3172b 

38 

1676 

61 

31 

3334 

31 

38 

50 

33 

31 

3172c 

39 

1676-1 

62 

32 

3335 

32 

39 

51 

34 

32 

3172il 

40 

1675-2 

63 

33 

3336 

33 

40 

52 

35 

33 

3172e 

41 

1676-3 

64 

34 

3337 

34 

41 

53 

36 

34 

31721 

42 

1676-4 

65 

35 

3338 

35 

42 

54 

37 

35 

3172k 

43 

1676-5 

66 

36 

3339 

36 

43 

55 

38 

36 

3172U 

44 

1676-6 

67 

37 

3340 

37 

44 

56 

39 

37 

3172i 

45 

1676-7 

6K 

38 

3341 

38 

45 

57 

40 

38 

3172i 
3172U 

46 

1676-8 

60 

39 

3342 

39 

46 

58 

41 

39 

47 

1676-9 

70 

40 

3343 

40 

47 

59 

42 

40 

31721 

48 

1676-10 

71 

41 

3344 

41 

48 

60 

43 

41 

3172m 

49 

1676-11 

72 

42 

334. -| 

42 

49 

61 

44 

42 

317211 

50 

1676-12 

73 

43 

3346 

43 

50 

62 

45 

43 

31720 

51 

1676-13 

74 

44 

3347 

44 

51 

63 

46 

44 

31721) 

52 

1676-14 

75 

45 

3348 

45 

52 

64 

47 

45 

3172(1 

53 

1676-15 

X 


TABLE  OF  CORRESPONDING  SECTIONS. 


Table  of  Corresponding  Sections  of  the  Statutes 

(Continued). 


N.  Y. 

Commis- 
si oner's 
draft.* 

Ariz. 

111. 

Kans. 

M(l. 

Mich. 

Ncbr. 

Ohio. 

K.  I. 

Wis. 

76 

46 

3349 

46 

53 

65 

48 

46 

3172r 

54 

1676-16 

T7 

47 

3350 

47 

54 

66 

49 

47 

3172s 

55 

1676-17 

78 

48 

3351 

48 

55 

67 

50 

48 

31721 

56 

1076-18 

79 

40 

3352 

49 

56 

OS 

51 

49 

3172V1 

57 

1670-19 

80 

50 

3353 

50 

57 

69 

52 

50 

3172V 

58 

1676-20 

90 

51 

3354 

51 

58 

70 

53 

51 

3172W 

.59 

1676-21 

91 

52 

3355 

52 

59 

71 

54 

52 

3172X 

60 

1676-22 

92 

53 

3356 

53 

60 

72 

55 

53 

3172.V 

61 

1670-23 

93 

54 

3357 

54 

61 

73 

56 

54 

3172Z 

62 

1070-24 

94 

55 

3358 

55 

62 

74 

57 

55 

3173 

63 

1670-25 

95 

56 

3359 

56 

63 

75 

58 

56 

3173a 

64 

1676-26 

96 

57 

3360 

57 

64 

76 

59 

57 

3172b 

G5 

1676-27 

97 

58 

3361 

58 

65 

77 

60 

58 

3173c 

66 

1676-28 

98 

59 

3362 

59 

66 

78 

61 

59 

3173il 

67 

1676-29 

110 

60 

3363 

60 

67 

79 

62 

60 

3173e 

6S 

1677 

111 

61 

3364 

61 

68 

80 

63 

61 

3173f 

^■{ 

1677-1 

112 

62 

33C5 

62 

69 

81 

64 

62 

3173K 

70 

1677-2 

113 

63 

3366 

63 

70 

82 

65 

63 

3173h 

71 

1677-3 

114 

64 

3367 

64 

71 

S3 

66 

64 

31731 

72 

1677-4 

115 

65 

3368 

65 

72 

84 

67 

65 

3173J 

73 

1677-5 

116 

66 

3369 

66 

73 

85 

68 

66 

3173k 

74 

1677-6 

117 

67 

3370 

67 

74 

S6 

69 

67 

31731 

75 

1677-7 

118 

68 

3371 

68 

75 

S7 

70 

68 

3173m 

76 

1677-8 

119 

69 

3372 

69 

76 

88 

71 

69 

3173n 

i    t 

1677-9 

130 

70 

3373 

70 

77 

89 

72 

70 

31730 

78 

1678 

131 

71 

3374 

71 

78 

90 

73 

71 

3173p 

79 

1678-1 

132 

72 

3375 

72 

79 

91 

74 

72 

3173C1 

80 

1678-2 

133 

73 

3376 

73 

80 

92 

75 

73 

3173r 

81 

1678-3 

134 

74 

3377 

74 

81 

93 

76 

74 

3173s 

82 

1678-4 

135 

75 

3378 

75 

82 

94 

77 

75 

7173t 

83 

1678-5 

136 

76 

3379 

76 

83 

95 

78 

76 

3173U 

84 

1678-6 

137 

77 

3380 

77 

84 

96 

79 

77 

3173V 

85 

1678-7 

138 

78 

3381 

78 

85 

97 

80 

78 

3173\v 

S6 

1678-8 

139 

79 

3382 

79 

86 

98 

81 

79 

3173X 

S7 

1678-9 

140 

80 

3383 

80 

87 

99 

82 

80 

3173y 

ss 

1678-10 

141 

81 

3384 

81 

88 

100 

83 

81 

3173Z 

S9 

1678-11 

142 

82 

3385 

82 

89 

101 

84 

82 

3174 

90 

1678-12 

143 

83 

3386 

83 

90 

102 

85 

83 

3174a 

91 

1678-13 

144 

84 

3387 

84 

91 

103 

86 

84 

3174b 

92 

1678-14 

145 

85 

3388 

85 

92 

104 

87 

85 

3174c 

93 

1678-15 

146 

86 

3389 

86 

93 

105 

88 

86 

3174(1 

94 

167S-16 

147 

87 

3390 

94 

106 

89 

3174f 

95 

167S-17 

148 

88 

3391 

87 

95 

107 

90 

87 

3174f 

96 

1678-18 

160 

89 

3392 

88 

96 

108 

91 

88 

3174e 

97 

1678-19 

161 

90 

3393 

89 

97 

109 

92 

89 

3174h 

98 

1678-20 

162 

91 

3394 

90 

98 

110 

93 

90 

3174i 

99 

1678-21 

163 

92 

3395 

91 

99 

HI 

94 

91 

3174J 

100 

1678-22 

164 

93 

3396 

92 

100 

112 

95 

92 

3174k 

101 

1678-23 

165 

94 

3397 

93 

101 

113 

96 

93 

31741 

102 

1678-24 

166 

95 

3398 

94 

102 

114 

97 

94 

3174m 

103 

1678-25 

167 

96 

3399 

95 

103 

115 

98 

95 

317411 

104 

1678-26 

168 

97 

3400 

96 

104 

116 

99 

96 

31740 

105 

1678-27 

169 

98 

3401 

97 

105 

117 

100 

97 

31741) 

106 

1678-28 

170 

99 

3402 

98 

106 

118 

101 

98 

3174q 

107 

1678-29 

*  These  are  the  numbers  of  the  sections  as  enacted  in  the  fallowing  states:  Ala- 
bama Colorado,  Connecticut.  District  of  Columbia,  Florida,  Idaho,  Iowa,  Kentucky, 
Louisiana  Massachusetts,  Missouri,  Montana.  Nevada,  New  Jer.sey,  New  Mexico, 
North  Carohna,  North  Dakota,  Oregon,  Pennsylvania,  Tennessee,  Utah,  Virginia, 
Washington,  West  Virginia,  Wyoming.  In  some  instances  these  numbers  have 
been  changed  by  incorporating  "the  act  in  a  code. 


TABLE  OF  CORRESPONDING  SECTIONS. 


XI 


Table  of  Coreespondlxg  Sections  of  the  Statutes 

(Continued). 


N.  Y. 


171 
172 
173 
174 
175 
176 
177 
178 
179 
180 
181 
182 
183 
184 
185 
186 
187 
188 
189 

200 
201 
202 
203 
204 
205 
206 

210 
211 
212 
213 
214 
215 

220 
221 
222 
223 
224 
225 
226 

227 
228 
229 
230 

240 
241 
242 
243 
244 
245 
246 
247 
248 


Commis- 
sioner's 
draft.* 


100 
101 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 

119 
120 
121 
122 
123 
124 
125 

126 
127 
128 
129 
130 
131 

132 
133 
134 
135 
136 
137 
138 

139 
140 
141 
142 

143 
144 
145 
146 
147 
148 
149 
150 
151 


Ariz. 

m. 

Kans. 

Md. 

Mich. 

Nebr. 

3403 

99 

107 

119 

102 

99 

3404 

100 

108 

120 

103 

100 

3405 

101 

109 

121 

104 

101 

3406 

102 

110 

122 

105 

102 

3407 

103 

111 

123 

106 

103 

3408 

104 

112 

124 

107 

104 

3409 

105 

113 

125 

108 

105 

3410 

106 

114 

126 

109 

106 

3411 

107 

115 

127 

110 

107 

3412 

108 

116 

128 

111 

108 

3413 

109 

117 

129 

112 

109 

3414 

110 

118 

130 

113 

110 

3415 

111 

119 

131 

114 

111 

3416 

112 

120 

132 

115 

112 

3417 

113 

121 

133 

116 

113 

3418 

114 

122 

134 

117 

114 

3419 

115 

123 

135 

118 

115 

3420 

116 

124 

136 

119 

116 

3421 

117 

125 

137 

120 

117 

3422 

118 

126 

138 

121 

118 

3423 

119 

127 

139 

122 

119 

3424 

120 

128 

140 

123 

120 

3425 

121 

129 

141 

124 

121 

3426 

122 

130 

142 

125 

122 

3427 

123 

131 

143 

126 

123 

3428 

124 

132 

144 

127 

124 

3429 

125 

133 

145 

128 

125 

3430 

126 

134 

146 

129 

126 

3431 

127 

135 

147 

130 

127 

3432 

128 

136 

148 

131 

128 

3433 

129 

137 

149 

132 

129 

3434 

130 

138 

150 

133 

130 

3435 

131 

139 

151 

134 

131 

3436 

132 

140 

152 

135 

132 

3437 

133 

141 

153 

136 

133 

3438 

134 

142 

154 

137 

134 

3439 

135 

143 

155 

138 

135 

3440 

144 

156 

139 

136 

3441 

i36 
137 

145 

157 

140 

137 

3442 

138 

146 

158 

141 

138 

3443 

139 

147 

159 

142 

139 

3444 

140 

148 

160 

143 

140 

3445 

141 

149 

161 

144 

141 

3446 

142 

150 

162 

145 

142 

3447 

143 

151 

163 

146 

143 

344S 

144 

152 

164 

147 

144 

3449 

145 

153 

165 

148 

145 

3450 

146 

154 

166 

149 

146 

3451 

147 

155 

167 

150 

147 

3452 

148 

156 

168 

151 

148 

3453 

149 

157 

169 

152 

149 

3454 

150 

158 

170 

153 

150 

Ohio. 


3174r 

3174s 

31741 

3174U 

3174V 

3174W 

3174X 

3174y 

3174Z 

3175 

3175a 

3175b 

3175c 

3175d 

3175e 

3175f 

3175g 

3175h 

3175i 

3175J 

3175k 

31751 

3175m 

3175n 

31750 

3175p 

3175q 
3175r 
3175s 
31751 
3175U 
3175V 

3175W 

3175X 

3175y 

3175Z 

3176 

3170a 

3170b 

3176c 
3176d 
3176e 
31761 

3176g 

3176h 

3176i 

3176J 

3176k 

31761 

3170m 

317011 

31760 


R.I. 


OS 
09 
10 
11 
12 
13 
14 
15 
16 
17 
IS 
19 
20 
21 
22 
23 
24 
25 
26 

27 
28 
29 
30 
31 
32 
33 

34 
35 
36 
37 
38 
39 

40 
41 
42 
43 
44 
45 
40 

47 
48 
49 
50 


•  Thoso  arp  the  nnmbfrs  of  thf  soclions  as  fnartod  in  the  follow! 
baiiiii.  Colora'lo,  (V)iiiif(li<iil.  District  of  Coliiniliia,  Kloriila,  I'lalio,  Id 
Loiiisiaiui,  Massachusetts,  .Missouri,  .Montana,  .Ncva'la,  New  Jersey 
North  Carohna,  .North  Dakota,  (Brecon,  Pennsylvania,  'reiinessce,  1 
Washiniclon,  West  Virwnia,  Wyominir.  In  .some  iiislunces  these 
been  changed  by  incorporating  the  act  in  a  code. 


Wis. 


51 
52 
53 
.54 
,5.5 
50 
.57 
58 
59 


16' 
16' 
16' 
16' 
16' 
16- 
16' 
lO' 
16' 
16' 
16' 
16' 
16' 
16' 
16' 
16' 
16' 
16 
16' 

16' 
16 
16 
16 
16 
16 
16 


8-30 
S-31 
S-32 
S-33 
S-34 
8—35 
8-36 
8-37 
8-38 
8-39 
S-40 
S-41 
8-42 
8-43 
8-44 
8-45 
8-46 
8-47 
8-48 

9 

9-1 

9-2 

9-3 

9-4 

9-5 

9-6 


1680 

16S0a 

16S0b 

1680c 

1680d 

1680e 

lf)^^nf 

It'iMIt: 

lOsOh 
lOSOi 
lOSOi 
1080k 
10801 

1680m 
1680n 
1680O 
1680p 


1681 

1 68 1-1 

16S1-2 

1681-3 

1681-4 

16H1-5 

16Sl-{i 

1  OS  1-7 

1681-S 

g  states:  Ala- 

a,  Kentncky, 

New    Mexico, 

tall,   VirL'inia, 

lumber.s  have 


XI 1 


TABLE  OF  CORRESPONDING  SECTIONS. 


Table  of  Cokrp:sponding  Skctions  ok  the  Statutes 

(Co7icluded). 


Coniiiiis- 

N.  Y. 

sioiuM's 
(iiaft.* 

Ariz. 

111. 

Kans. 

Mil. 

Mich. 

Nebr. 

Ohio. 

i:.  1. 

Wis. 

260 

152 

3455 

151 

159 

171 

154 

151 

3176p 

160 

1681-9 

261 

153 

3456 

152 

160 

172 

155 

152 

3176C1 

161 

1681-10 

262 

154 

3457 

153 

161 

173 

156 

153 

3176r 

162 

1681-11 

263 

155 

3458 

154 

162 

174 

157 

1.54 

3176s 

163 

1681-12 

264 

156 

3459 

155 

163 

175 

158 

155 

3176t 

164 

1681-13 

205 

157 

3460 

156 

164 

176 

159 

156 

3176U 

165 

1681-14 

266 

158 

3461 

157 

165 

177 

160 

157 

3176V 

166 

1681-15 

267 

159 

3462 

158 

166 

178 

161 

158 

3176W 

167 

1681-16 

268 

160 

3463 

159 

167 

179 

162 

159 

3176X 

168 

1681-17 

280 

161 

3464 

160 

168 

180 

163 

160 

3176y 

169 

1681-18 

281 

162 

3465 

161 

169 

181 

164 

161 

3176Z 

170 

1681-19 

282 

163 

3466 

162 

170 

182 

165 

162 

3177 

171 

1081-20 

283 

164 

3467 

163 

171 

183 

166 

163 

3177a 

172 

1681-21 

284 

165 

346S 

164 

172 

184 

167 

164 

3177b 

173 

1681-22 

285 

166 

3469 

165 

173 

185 

168 

165 

3177c 

174 

1681-23 

286 

167 

3470 

166 

174 

186 

169 

166 

3177(1 

175 

1681-24 

287 

168 

3471 

167 

175 

187 

170 

167 

3177e 

176 

1681-25 

288 

169 

3472 

168 

176 

188 

171 

168 

3177f 

177 

1681-26 

289 

170 

3473 

169 

177 

189 

172 

169 

3177g 

178 

1681-27 

300 

171 

3474 

170 

178 

190 

173 

170 

3177h 

179 

1681-28 

301 

172 

3475 

171 

179 

191 

174 

171 

3177i 

180 

1681-29 

302 

173 

3476 

172 

180 

192 

175 

172 

3177J 

181 

1681-30 

303 

174 

3477 

173 

181 

193 

176 

173 

3177k 

182 

1681-31 

304 

175 

3478 

174 

182 

194 

177 

174 

31771 

183 

1681-32 

305 

176 

3479 

175 

183 

195 

178 

175 

3177m 

184 

1681-33 

306 

177 

3480 

176 

184 

196 

179 

176 

317711 

185 

1681-34 

310 

178 

3481 

177 

185 

197 

180 

177 

31770 

186 

1681-35 

311 

179 

3482 

178 

186 

198 

181 

178 

3177p 

187 

1681-36 

312 

180 

3483 

179 

187 

199 

182 

179 

3177(1 

188 

1681-37 

313 

181 

3484 

180 

188 

200 

183 

ISO 

3177r 

189 

1681-38 

314 

182 

3485 

181 

189 

201 

184 

181 

3177s 

190 

1681-39 

315 

183 

3486 

182 

190 

202 

185 

182 

31771 

191 

1681-40 

320 

184 

3487 

183 

191 

203 

186 

183 

3177U 

192 

1684 

321 

185 

3487 

184 

192 

204 

187 

184 

3177V 

193 

1684-1 

322 

186 

3487 

185 

193 

205 

188 

185 

3177W 

194 

1684-2 

323 

187 

3487 

186 

194 

206 

189 

186 

3177X 

195 

1684-3 

324 

188 

3487 

187 

195 

207 

190 

187 

3177y 

196 

1684-4 

325 

189 

3487 

188 

196 

208 

191 

188 

3177Z 

197 

1684-5 

*  These  are  the  numbers  of  the  sections  as  enacted  in  the  following  states:  Ala- 
bama, Colorado,  Connecticut,  District  of  Columbia,  Florida,  Idaho,  Iowa,  Kentucky, 
Louisiana,  Massachusetts,  Mi.ssouri,  Montana,  Nevada,  New  Jersey,  New  Mexico, 
North  Carolina,  North  Dakota,  Oregon,  Pennsylvania,  Tennes.see,  Utah,  Virginia, 
Washington,  West  Virginia,  Wyoming.  In  some  instances  these  numbers  have 
been  changed  by  incorporating  the  act  in  a  code. 


TABLE  OF  CASES. 


PAGE. 

Ackley  School  District  z:  Hall,  113  U.  S.  135 ^4 

Adair  z:  Lenox,  15  Ore.  489 59,  7^,  n- 

Adams  v.  Wright,  14  Wis.  408 124,  165 

Aebi  V.  Bank  of  Evansville,  124  Wis.  73 130,  177 

JLina  National  Bank  v.  Charter  Oak  Life  Ins.  Co.,  50  Conn..  167,    46 

z:  Fourth  National  Bank,  46  N.  Y.  82 in 

Aiken  v.  Marine  Bank,  16  Wis.  679 118 

Albany  County  Bank  z:  Peoples'  Ice  Co.  92  App.  Div.  47 65,    67 

Albertson  z:  Laughlin,  173  Pa.  St.  525 14 

Albrecht  v.  Atrimpler,  7  Pa.  St.  476 43 

Alexander  &  Co.  v.  Hazelrigg  (Ky.),  97  S.  W.  Rep.  353 73,  1/6 

Alger  v.  Scott,  54.  N.  Y.  14 ^49 

Allen  V.  Corn  Exchange  Bank,  87  App.  Div.  335 56 

V.  Rightmere,  20  Johns.  365 1^5 

V.  Suydam,   17  Wend,  368 160 

American  Bank  z:  Jcnness,  2  Mete.  288 •  •     66 

Exchange   National    Bank  v.   American   Hotel  Victoria 

Co.,  103  App.  Div.  372 i-° 

Exchange  National  Bank  v.  New  York  Belting  etc.,  Co., 

148  N.  Y.  698 69.     70 

National  Bank  z:  Junk  Bros.,  94  Tenn.  634 123 

Ames  V.  Meriam,  98  Mass.  294 i"7 

Amsinck  v.  Rogers,  189  N.  Y.  252,  103  App.  Div.  428 96,  I35.  150 

Androscoggin  Bank  r.  Kimball,  10  Cush.  373 24 

Angle  V.  Insurance  Co.,  92  U.  S.  330 m8 

Annville  National  Bank  v.  Kettering,  106  Pa.  St.  53i UO,  131 

Anthony  v.  Valentine,  130  Mass.  119 43 

Armour  v.  McMichael,  36  N.  J.,  Law  92 40 

Armstrong  v.  American  Exchange  Nat.  Bank,  133  U.  S.  433 64,  150 

V.  Bank,  46  Ohio  St.  412 20 

V.  National  Bank  of  Boycrtown,  90  Ky.  431 52 

V.  Thurston.   1 1    Md.   148 108 

Arnd  v.  Sjoblom,  131  Wis.  642 74 

Arnold  v.  Dresser,  8  Allen.  435 105 

V.  Rock  River  Valley  Union  R.  R.  Co.,  5  I^ucr.  207 IS 

Artisans'  Bank  v.  Backlis,  36  N.  Y.  io<) "9 

Attorney-General  v.  Continental  Life  Insurance  Co.,  71  N.  Y.  325.    180 

Aukland  r.  Arnold   (Wis.),  ui  N.  W.  Rep.  212 6,  67.     68 

Ayer  V.   Ilutchins.  4  Mass.  370 64.    66 

Aymar  v.  Beers,  7  Cow.  705 5 

[xiiil 


XIV  TABLE    OF    CASES. 

PAGF. 

Bachelor  v.  Priest,  12  Pick.  399 160 

Backus  z:  Danforth.   10  Conn.  297 8 

Bacon  z'.  Burnhani,  37  N.  Y.  614 85 

V.  Hanna,   137  N.   Y.  379 132 

z'.   Page.   I    Conn.  ao5 19 

Baer  z'.  Lcpport.  12  Hun,  516 132 

Bailey  r.   Soutiiwcstcrn  R.  R.  Bank,   11   Fla.  266 134,  149 

Baldwin  z\  Daly,  41   Wash.  416 14S 

Baltimore  &  Ohio  Railroad  Co.  v.  First  National  Bank  of  Alex- 
andria,   102   Va.    757 3.  180 

Bank  z'.  Carter,  88  Tenn.  279 179 

v.  Dibbrell,  91  Tenn.  301 118,   129 

z:  Looney.  99  Tenn.   278 33<     79 

V.  Millard,  10  Wall.   152 180 

v.  Patton,   109  111.  479 180 

V.  Price,  52  Iowa,  530 t8 

v.  Schulcr,  120  U.  S.  511 180 

z:  Simpson,  90  N.  C.  469 140 

Bank  of  Alexandria  v.  Swann,  9  Peters,  33 119,  i^3 

America  v.  Senior,  1 1  R.  I.  376 59 

America  v.  Waydell,  187  N.  Y.  115 42,  52,    65 

103  App.  Div.  25 42 

British  North  America  v.  Ellis,  6  Sawyer,  98 58 

Columbia  z'.  Lawrence,  i  Peters,  578 120,  125,  127 

Cooperstown  z'.  Woods,  28  N.  Y.  545 119 

28  N.  Y.  561 164 

England  v.  Vagliano  ( 1891 ),  App.  Cas.  107 21 

Genesee  v.  Patchin  Bank,  13  N.  Y.  309 46,     56 

Jamaica  v.  Jefferson,  92  Tenn.  537 84,     92 

Metropolis  v.  First  National  Bank  of  Jersey  City,  19  Fed. 

Rep.  658   5 

Michigan  v.    Ely,    17  Wend.   508 i54 

Monongahela  Valley  z'.  Weston,  172  N.  Y.  259 69 

Montgomery  County  v.  Walker,  9  S.  &  R.  229 45 

Monticello  v.  Dooly,    1 13  Wis.  590 39 

Ohio  Valley  v.  Lockwood,  13  W.  Va.  392 148 

Port  Jefferson  z:  Darling,  91  Hun,  236 122,  132 

Rome  V.  Village  of  Rome,  19  N.  Y.  20 17 

St.  Albans  v.  Farmers'  and  Mechanics'  Bank,  10  Vt.  141-     81 

Syracuse  v.  Hollister,  17  N.  Y.  46 103 

the  State  v.  Muskingum  Bank,  29  N.  Y.  619 56 

i  United  States  v.  Bank  of  Georgia,    10  Wheat.  333 81 

V.  Biernc,    i   Gratt.  234 92 

V.  Carneal,   2    Peters,   543 120,  128 


o 


TABLE    OF    CASES.  XV 


PAGE. 
Bank  of  Utica  v.  Ives,  17  Wend.  501 140 

V.  Smith,   18  Johns.   230 103 

Bankers'  Iowa   State  Bank  v.  Mason  Hand  Lathe  Co.,   121   Iowa, 

'^"^^ 44,     45 

Barclay  v.  Bailey,  2  Camp.  527 loi 

V.  Weaver,  19  Pa.  St.  396 109 

Baring  v.  Clark,   19  Pick.  220 136,  169 

Barker  v.  Parker,  6  Pick.  80 108 

Barney  v.  Worthington,  27  N.  Y.  112 154 

Barry  v.  Crowley,  4  Gill,   (Md.)   194 164,  165 

Bartlett  v.  Isbell,   31    Conn.   297 91,  133 

V.  Robinson,  39  N.  Y.   187 127 

Bass  V.  Inhabitants  of  Wellesley,  192  Mass.  526 137 

Bassonhorst  v.  Wilby,  45  Ohio  St.  336 19,  108 

Batchelder  v.  White,  80  Va.   103 148 

Bateman  v.  Joseph,  2  Camp.  461 132 

Batterman  v.  Dutcher,  95  App.  Div.  2(3 43 

Baumcistcr  v.  Kuntz  (Fla.)  42  South  Rep.  886 3,  83,  108,  109,  130 

Baumgardner  v.  Reeves,  35  Pa.  St.  250 loi 

Baxendalc  v.  Bennett,  L.  R.  3  Q.  B.  Div.  525 26 

Baxter  v.   Little,  6   Met.   7 76 

Bay  V.  Church,   15  Conn.   129 135 

Bcalls  V.  Peck,  12  Barb.  245 122 

Beard  v.  Dedolph,  29  Wis.  136 61 

Beauregard  v.  Knowlton,  156  Mass.  395 106 

Bcckwith  V.   Angell,   6  Conn.  317 51 

Bedford  Bank  v.  Acoarn,  125  Ind.  582 m 

Beem  v.  Farrell,  (Iowa)   113  N.  W.  Rep.  509 35 

Bclden  v.  Hann,  61   Iowa,  42 51 

V.  Lamb,    17   Conn.   451 107 

Bell  z/.   Alexander,   21    Gratt.    i 178 

V.  Dagg,  60  N.  Y.  528 88 

V.  Hagcrstown  Bank,  7  Gill,  216 120,  124,  125 

Belmont  v.  1  logc,  35  N.  Y.  65 69 

Bemis  v.  McKenzic,  13  Fla.  553 19 

Benedict  v.  Kress,  97  .App.   Div.  65 39 

Benedict  v.  Schmieg,  13  Wash.  476 105 

Benjamin  v.  Rogers,  126  N.  Y.  60 47 

Benn  v.  Kutzschan,  24  Ore.  28 9,  qi 

Berg  V.  Abbott.  83  Pa.  St.  177 loj 

Berkley  v.  Tinslcy,  88  Va.   looi,  1004 45 

P.crkshirc  I'>ank  v.  Jones,  6  Mass.  524 108 

Berry  v.  Robinson.  9  Johns.  r2i 19,  59 

Bicgler  v.  Merchants'  Loan  aii<l  Trust  Co..  62  111.  App.  560 15 


.\\  1  TABLE    OF    CASES. 

PACE. 

Bigge  7'.  Piper,  86  Tciin.  589 17 

Bigley's  Adinr.  t:  Cluff,  16  Gratt.  284 ij8 

bill  f.  Stewart,  156  Mass.  508 i77 

Birrell  f.  Dickerson,  64  Conn.  61 75 

Bisbing  r.  Graham,  14  Pa.  St.  4 54 

Bishop  f.  Chase,    156  Mo.    158 .' 50 

v.  Dexter,  2  Conn.  419 19 

Black  z:  First  National  15ank  of  Westminster,  96  Md.  399 45,     76 

v.  Ridgway,  131   Mass.  80 44 

Blackman   v.   Lehman,   63    Ala.    547 20,92 

V.  Ncaring,  43  Conn.  60 104 

Blaine  v.  Bourne,  11  R.  I.  119 52 

Blair  v.  Wilson,  28  Grat.  170 176 

Blakeslee  v.  Hewett,  16  Wis.  341 'oo 

Blenderman  v.  Price,  50  N.  J.  Law  296 I34 

Block  V.  Bell,  i  M.  &  R.  149 30 

Board  of  Education  v.  Fonda,  77  N.  Y.  350 140 

Boehm  v.  Sterling,  7  T.  R.  423,  430 64 

Boetcher  v.  Colorado  National  Bank,  15  Col.  16 180 

Bogarth  v.   Brcedlove,  39  Te.x.  561 14*^ 

Bond  v.  Farnham,  5  Mass.   170 lOQ 

V.  Storrs,   13   Conn.  416 96 

Born  V.  First  National  Bank,  123  Ind.  78 i79 

Boston  Bank  v.  Hodges,  9  Pick.  420 104 

Boston  Steel  &  Iron  Co.  v.  Steuer,  183   Mass.   140 26,     64 

Boswell  V.  Citizens  Savings  Bank  (Ky.),  96  S.  W.  Rep.  797 176 

Bowen  v.  Newell,  8  N.  Y.  100 ;  13  N.  Y.  390 I77 

Boyd  V.  Bank  of  Toledo,  32  Ohio  St.  526 108 

V.  :\IcCann,  10  Md.   118 24,     77 

V.  Orton,   16  Wis.  495 ^22 

Boyd's  Admr.  v.  City  Savings  Bank.  15  Gratt.  501 120,  121,   122 

Brackett  v.  Mountford,  11  Me.  115 u8 

Erailsford  v.  Williams,  15  Md.  151 ^  ^^ 

Brainerd  v.  N.  Y.  &  H.  R.  R.  Co.,  25  N.  Y.  496 i7 

Bramhall  v.  Atlantic  National  Bank,  36  N.  J.  Law,  243 75 

Brandt  v.  Mickle,  26  Md.  436 I09 

Bray  v.  Hadwcn,  5  Maulc  &  Sel.  68 126 

Breckhill  v.  Randall,  102  Ind.  528 182 

Breed  v.  Hillhouse,  7  Conn.  523 "5 

Breneman  v.  Furniss,  90  Pa.  St.  186 43.    92 

Brewster  v.  Arnold,  i  Wi?,  264 i^S,  119,  131 

V.  McCardle,  8  Wend,  478 22,  63 

V.  Schrader,  26  Misc.  (N.  Y.)  480 4i 


TABLE    OF    CASES.  XVll 

PAGE. 

Bridgeport  City  Bank  v.  The  Empire  Stone  Dressing  Co.,  30  Barb. 

421 46 

Bridgeport  City  Bank  v.  Welsh,  29  Conn.  475 40 

Briggs  I'.  Partridge,  64  N.  Y.  363 32 

Brill  V.  Tuttle,  81  N.  Y.  454 M9,  I50 

Brill  Co.  v.  Norton  &  Taunton  St.  Ry.  Co.,  189  Mass.  431 46 

Bristol  r.  Warner,   19   Conn.   7 14.  I7,  1/5 

Broadway  Trust  Co.  v.  Manheimer,  47  Misc.  465 73 

Brockway  v.  Allen,  17  Wend.  40 i57 

Brooks  V.  Sullivan,  129  N.  C.  190 40,    41 

Brown  v.  Ambler,  66  Md.  391 I54 

V.  Bank  of  .A.bington,  85  Va.  95 120 

V.  Butchers'  and  Drovers'  Bank,  6  Hill,  443 8,  22,     32 

V.  Curtiss,  2  N.  Y.  225 115 

V.  Davis,  3  T.  R.  80 64 

V.  Hull,  33  Gratt.  23 19,  58,     .59 

V.  Moffey,  15  East,  222 109,  130 

Browne  v.  Philadelphia  Bank,  6  S.  &  R.  484 165 

Brownell  v.  Winnie,  29  N.  Y.  400 148 

Bryant  v.  Eastman,  7  Cush.   in 57 

V.  La  Banque  du  Peuple   (1893),  App.  Cas.   170 34 

V.  Merchants'   Bank,  8  Bush.  43 131 

V.  Taylor,  19  Minn.  396 131 

Buchanan  v.  Wren,  30  S.  W.  Rep.  1077 14 

Buck  V.  Freehold  Bank,  37  N.  J.  Law,  307 no 

Buckley  v.  Second  National  Bank  of  Jersey  City,  35  N.  J.  Law,  400    35 

Buckner  v.  Finlcy,  2  Peters,  586 150 

Bull  V.  Bank  of  Kasson,  123  U.  S.  105 176 

Burgess  V.  Vreeland,  4  Zab.  71 125 

Burgcttstown  National  Bank  v.  Nill,  213  Pa.  St.  456 109 

Burroughs  v.  Moss,  10  Barn.  &  Cress.  558 76 

Burson  v.  Huntington,  21  Mich.  416 28 

Bush  t'.  Gilmorc,  45  App.  Div.  (N.  Y.)  89 95 

Cabot  Bank  v.  Morton,  4  Gray,    156 93 

V.  Warner,  92  Mass.  522 n  7 

Cady  V.  Bradshaw,  n6  N.  Y.  188 108 

Callahan  r.  Kentucky  Bank.  82  Ky.  231 123 

Camden  National  Bank  ?•.  Fries-Brcslin  Co.,  214  Pa.   St.  395 4.^ 

Campbell  :'.  French,  6  T.  R.  200 135 

Canajoharie  National  Bank  v.  Dicfcndorf,  123  N.  Y.  191 78 

Canal  Bank  t.  Bank  of  Albany,  i   Hill.  2S7 88 

Camwright  v.  Gray.  127  N.  Y.  92 M-  20.  I75 

Carpenter  v.  Nat.  Bank  of  the  Republic.  106  Pa.  St.  170 44 

Carr  r.     I.efcrre.  27  Pa.  St.  413 8 


XVlll  TABLE    OF    CASES. 

PAGS. 

Carroll  f.  Swift.  128  N.  V.   19 178 

Carter  r.  Burlcy,  9  N.  H.  558 165 

f.  Wolf,  I  Heisk,  674 33 

Cary  f.  White,  5^  N-  V.   138 39,  139,  140 

Casco  National  Rank  :■.  Clark,  139  N.  Y.  307 34 

Cayuga  County  Bank  v.  Bennett,  5  Hill,  236 122 

V.  Hunt,  2   Hill,  63s 124,  160 

V.  Wordon.   i   X.   Y.  413 105,  1 19 

V.  Worden,  6.  N.  Y.  19 1 18,  120 

Cecil  Bank  v.  Farmers'  Bank,  22  Md.  148 52 

Cellers  v.  Lyons,  89  Pac.  Rep.  426 141 

Central  Bank  v.  The  Empire  Stone  Dressing  Co.,  26  Barb.  23....  46 

National  Bank  v.  Cobb,  184  Mass.  328 37 

V.  Dreydoppel,  134  Pa.  St.  499 85 

R.  R.   Co.  V.  The  First  National  Bank  of  Lynchburg,  73 

Ga.  384   52 

Champion  z'.  Gordon,  70  Pa.  St.  474 i77 

Chandler  z'.  Drew,  6  N.  H.  469 76 

Chanoine  v.  Fowler,  3  Wend.  173 116 

Chapman  v.  Keene,  3  Adol.  &  Ellis,  193 116 

V.  White,  6  N.  Y.  412 176 

Charles  v.  Dennis,  42  Wis.  56 91 

Chase  National  Bank  v.  Faurot,  149  N.  Y.  532 17 

Cheever   1:    Pittsburgh,    Shenango   &   Lake   Erie    R.    R.    Co.,    150 

N.  Y.  59 69 

Chemical  National  Bank  v.  Kellogg,  183  N.  Y.  92 58,  70,  74 

Chestnut  r.  Chestnut,  104  Va.  539 24 

Chicago,  etc.,  R.  R.  Co.  v.  West,  37  Ind.  211 133 

Railway  Equipment  Co.  z'.  Merchants'  National  Bank,  136 

U.    S.   268 12 

Chicopee  Bank  ?'.  Chapin,  8  Mete.  40 43 

Chipman  v.  Tucker,  38  Wis.  43 28 

Chouteau  v.  Webster,  6  Mete,  i 128 

Christian  z:  Keene,  80  Va.  369 83 

Church  V.  Clark,  21   Pick.  309 104 

v.  Howard,  17  Hun,  5 148 

V.  Stevens,  107  N.  Y.  Supp.  310 17 

Chyrsler  v.  Griswold,  43  N.  Y.  209 17 

Cincinnati  H.  &  D.  R.  R.  Co.  v.  Metropolitan  National  Bank,  54 

Ohio   St.  60 iBo 

Cincinnati  Oyster  &  Fish  Co.  v.  National  Lafayette  Bank,  51  Ohio 

St.  106  179 


TABLE    OF    CASES.  XIX 

PAGE. 
Citizens'  Bank  z:  First   National   Bank    (Iowa),    113   N.  W.   Rep. 

481 98,  99,  115 

Citizens"  Bank  v.  Lay,  80  Va.  436 104,  i43 

National  Bank  v.  Richmond,  121  Mass.  no 146 

z'.  Williams,  174  Pa.  St.  66 146 

Citizen's  State  Bank  v.  Cowles,  180  N.  Y.  346 65 

89   App.    Div.    281 65,    69 

City  Bank  of  Sherman  v.  Weiss,  68  Tex.  332 52 

City  Deposit  Bank  v.  Green,  130  Iowa,  384 65 

Clapp  v.  Rice,  13  Gray.  403 92,    93 

Clark  z:  Cock,  4  East.  72 i53 

z'.  Sigourney,  17  Conn.  520 49 

z:  Seabright,   135  Pa-   St.   173 102 

Cline  V.  Miller,  8  Md.  274 44,  I57 

Glutton  v.  Attenborough  (1895),  2  Q.  B.  707 21 

Coddington  v.  Bay,  20  Johns.  637 40 

V.  Davis,  I  N.  Y.  186 131 

Cogswell  V.  Hayden,  5  Ore.  22 85 

Cole  V.   Gushing,  8  Pick.  48 ^39 

Coleman  v.  Carpenter,  9  Pa.  St.  178 ^23 

Collins  V.  Gilbert,  94  U.  S.  753 78 

Colonial  National  Bank  v.  Duerr,  108  App.  Div.  215 146,  148 

Colt  v.  Noble,  5  Mass.  167 117,  127 

Columbian  Banking  Co.  v.  Bowen  (Wis.)   114  N.  W.  451.... 6,  98,  103 

Comer  v.  Dufour,  95  Ga.  376 178 

Commercial  Bank  of  Kentucky  v.  Varnum,  49  N.  Y.  269.  .150,  163,  166 

National  Bank  v.  Armstrong,  148  U.  S.  50 52 

V.  Hamilton    National    Bank,    42   Fed. 

Rep.  880   52 

V.  Henningcr,  105  Pa.  St  496 m.  112 

V.  Hughes.   17  Wend.  94 no 

V.  Zimmerman,   185   N.  Y.  210... 5,  97,     98 
V.  Citizens'     State     Bank,     132    Iowa, 

706 39-  40,    65 

Commonwealth  v.  Am.  Life  Ins.  Co.,  167  Pa.  St.  586 i49 

Comstock  z:  Hicr,  73  N.  Y.  269 40 

Conant  v.  Johnston,  165  Mass.  450 78 

Condon  r.  Pcarcc,  43  Md.  83 9i 

Congress  Brewing  Co.  v.  Habcnicht.  83  App.  Div.  141 130 

Connors  v.  Taylor.   13  Wis.  224 84 

Conover  v.  Stillwell.  34  N.  J.  Law.  54 39 

Consolidation  National  Bank  v.  Kirkland,  99  App.  Div.  121 65,     66 


XX  TABLE    or    CASES. 

PAGE. 

Continental  Life  Insurance  Co.  v.  Barber,  50  Conn.  567 131 

National  Bank  v.  Bell,  125  N.  Y.  38 4^ 

V.  Townsond.  87  N.  Y.  8 64 

V.  Tradesmen's  National  Bank,  36  App. 

Div.    112    82 

Cook  V.  American  Tubing  and  Webbing  Co.   (R.  1.),  65  All.  Rep. 

641 77 

V.  Baldwin,  126  Mass.  317 "53 

V.  Foraker,  193  Pa.  St.  461 126 

V.  Litchfield,  9  N.  Y.  279 "  '9 

V.  Warren,  88  N,  Y,  37 "3i 

Cooke  V.  State  National  Bank,  52  N.  Y.  96 I79 

Coolidge  v.  Brigham,  S  Mete.  68 88 

V.  Ruggles,   15  Mass.  387 "4 

Corbett  z:  Fetzer,  47  Neb.  269 54 

Corlies  v.  Howe,  1 1  Gray,  125 43 

Corn  Exchange  Bank  v.  American  Dock  &  Trust  Co.,  149  N.  Y.  174.  8 

Coruth  V.  Walker,  8  Wis.  252 165 

Costello  V.  Crowell,  127  Mass.  293 5 

Coster  V.  Thomason,  19  Ala.  717 122 

Cottrell  V.  Watkins,  89  Va.  801 46,  64,  143 

Couch  V.  Waring,  9  Conn.  261 138 

Coulter  V.  Richmond,  59  N.  Y.  478 85 

County  of  Beaver  v.  Armstrong,  44  Pa.  St.  63 8 

Cover  V.  Myers,  75  Md.  406 76,  92 

Covert  V.  Rhodes,  48  Ohio  St.  66 180 

Cowan  V.  Hallock,  9  Colo.  576 38 

Cowee  V.  Cornell,  75  N.  Y.  91 43 

Cowing  V.  Altman,  71  N.  Y.  441 22 

Cowles  V.  Harts,  3  Conn.  522 54 

V.  Horton,  3  Conn.  523 120 

V.  Peck,  55  Conn.  251 no 

Cowton  V.  Wickersham,  54  Pa.  St.  302 82 

Cox  V.  Citizens'  State  Bank,  73  Kans.  789 ^77 

V.  National  Bank,  100  U.  S.  713 96 

Crandall  v.  Rollins,  83  App.  Div.  618 34 

Crawford  v.  Millspaugh,  13  Johns.  87 140 

V.  Roberts,  8  Ore.  324 I37 

V.  West  Side  Bank,  100  N.  Y.  50 I47 

Credit  Company  v.  Howe  Machine  Co.,  54  Conn.  357 69 

Crim  V.  Starkweather,  88  N.  Y.  339 97 

Critchlow  v.  Parry,  2  Camp.   182 9^ 

Croft's  Appeal,  42  Conn.  154 69 


TABLE    OF    CASES.  XXI 

PAGE. 

Cromwell  v.  County  of  Sac,  96  U.  S.  60 74 

V.  Hj-nson,   2   Camp.    596 loi 

Crosby  f.  Roub,  16  Wis.  616 49 

Crout  V.  DeWolf,  i  R.  I.  393 37i 

Crowley  f.  Barry,  4  Gill.  I94 ^°5 

Cruger  v.  Armstrong,  3  Johns.  5 '  76 

Culbertson  z:  Nelson,  93  Iowa,  187 9 

Culver  f.  Reno  Real  Estate  Company,  91  Pa.  St.  367 46 

Cumberland  Bank  z:  Hann.  3  Harr.  222 59,  76 

Cummings  v.  Kohn.  12  Mo.  App.  585 53 

Cunningham  z:  Scott.  90  Hun.  410 69 

Curran  z:  Witter,  68  Wis.  16 1/6 

Curtis  z:  Hazen.  56  Conn.  146 8 

Cuyler  v.  Stevens.  4  Wend.  566 1 19 

Dalrymple  z:  Hillenbrand,  62  N.  Y.  5 9i 

Daniel  z:  Glidden.  38  Wash.  556 33 

Dann  v.  Norris,  24  Conn.  337 -»9 

Darbishire  r.  Parker,  6  East.  8 124 

Dart  z:  Sherwood.  7  Wis.  5^3 3i 

Darwin  r.  Rippey,  63  N.  C.  318 148 

Davis  V.  Garr,  6  N.  Y.  124 20 

z:  Miller.  14  Gratt.  i 64.  76,  143 

v.  Old  Colony  Railroad  Company,  131  Mass.  258 46 

Davis  V.  Schmidt,  126  Wis.  461 105 

V.  Wait,  12  Oregon,  425 44 

Sewing  Machine  Co.  v.  Best,  105  N.  Y.  59 26 

Dawson  z:  Wombles,  123  Mo.  App.  340 39 

Day  v.  RidgAvay,  17  Pa.  St.  303 9i 

Deahy  v.  Choquet.  (R.  I.)  67  Atl.  Rep.  421 85,  139 

Debedian  z:  Gala.  64  Md.  262 22 

Dcering  v.  Creighton,  19  Ore.  1 18 85 

Delano  v.  Bartlett,  6  Gushing.  364 38 

De  la  Torre  v.  Barclay,  i  Stark.  308 i35 

Delaware  County  Trust  Co.  z:  Title  Ins.  Co.,  199  Pa-  St.  17 142 

Demclman  v.  Brazier,  193  Mass.  588 3-       6 

Dcnningrr  r.  Miller.  7  App.  Div.  409 122 

Dcnniston  v.  Stewart.   17  How.   (U.  S.)  606 163 

Deposit  Rank  of  Georgetown  7-.  Fayette  National  Bank,  90  Ky.  10.  82 

Derham  v.  Donohuc.  155  Fed.  Rep.  385 119.  120 

De  Witt  V.  Walton,  9  N.  Y.  574 ^^ 

Deyo  V.  Thompson.  53  App.  Div.  CN.  Y.)   12 I75 

Dickens  v.  Real.  10  Pet.  572 '°5 

V.  Hall,  87  Pa.  St.  379 '29 

Dietrich  v.  Boylic,  23  La.  Ann.  767 9 


XXU  TABLE    OF    CASES. 

PAGE. 

Dillonbeck  v.  Bygcrt,  97  N.  Y.  303 143 

Diiigmau  v.  Anisink,  yj  Pa.  St.  114 43 

Dinsmore  v.  Duncan,  57  N.  Y.  573 17 

Dodd  V.  Denny,  6  Oregon,    156 19 

7'.  Jette,   10  Oregon,  31 176 

Dodson  V.  Taylor,  56  N.  J.  Law,  11 119,  122 

Dolph  V.  Rice,   18  Wis.  397 177 

Donald  z\  iMagruder,  3  Peters,  470 92 

Donegan  v.  Wood,  49  Ala.  25 1 164 

Dorsey  v.  Wolff,  142  111.  589 9 

Doty  V.  Caldwell,  38  S.  W.  Rep.  1025 180 

Doubleday  v.  Kress,  50  N.  Y.  410 100 

Dounes  v.  Church,  13  Peters,  205 174 

Downey  v.  O'Keefe,  26  R.  I.  571 3 

Draper  ?'.  Clemens,  7  Mo.  52 103 

Dresser  v.  Missouri,  etc.,  R.  R.  Construction  Co.,  93  U.  S.  95 67 

Drew  ZK  Towlc,  7  Frost,  412 44 

Drexler  v.  McGlynn,  99  Cal.  143 117 

Drum  V.  Drum,  133  Mass.  566 I47 

Ducket  V.  Von  Lillicnthal,  1 1   Wis.  56 164,  165 

Duffield  7'.  Johnston,  95  N.  Y.  369 14 

Dull  V.  Bricker,  76  Pa.  St.  255 154 

Durkin  v.  Cranston,  7  Johns.  442 173 

Dye  V.  Scott,  35  Ohio  St.  194 130 

Dykman  v.  Northridge,  i  App.  Div.  26 104,  166 

Easterly  v.  Barber,  66  N.  Y.  433 92 

Eaton  V.  Libbey,  165  Mass.  218 39 

V.  AIcMahon,  42  Wis.  484 91,  107 

Eckert  v.  Cameron,  7  Wright,   120 136 

Edelen  v.  White,  6  Bush.  408 92 

Edgerton  7k  Edgerton,  8  Conn.  6 17 

Edis  V.  Bury,  6  Barn.  &  Cress.  433 30 

Egbert  v.  Hanson,  34  Misc.  597 92 

Eilbert  i'.  Finkbeiner,  68  Pa.  St.  243 85 

Elgin  City  Banking  Co.  7:  Hall,  108  S.  W.  Rep.  1068 39,  54-     65 

Ellicott  V.  Martin,  6  ]Md.  509 62,    78 

Elliot  V.  Chestnut,  30  Md.  562 24 

Ellis  V.  Ins.  Co.,  4  Ohio  St.  628 82 

[•mm  V.  Carroll,  i  Ycrger,  144 33 

Eplcr  V.  Funk,  8  Pa.  St.  468 54 

Ernst  V.  Steckman,  74  Pa.  St.  13 I4 

Espy  V.  Bank  of  Cincinnati,  18  Wall.  620 176 

Etting  V.  Schuylkill  Bank,  2  Pa.   St.  355 119.  126 

Evans  v.  Freeman,  142  N.  C.  61 50 


TABLE    OF    CASES.  XXIU 

PAGE. 

Ex  parte  Barclay,  7  Ves.  597 116 

Moline,  19  Ves.  216 123 

Fair  v.  Howard,  6  Nev.  304 40 

Falkill  National  Bank  t'.  Sleight,  i  App.  Div.  189 140 

Fall  River  Union  Bank  v.  Willard,  5  Metclf.  216 103 

Fancourt  v.  Thorne,  9  Q.  B.  312 15 

Farmer  v.  Bank  of  Graettinger,  130  Iowa,  469 15 

Farmers'  Bank  v.  Ewing,  78  Ky.  264 131 

V.  Sprigg,  II   Md.  390 139 

etc..  Bank  v.  Troy  City  Bank,  i  Dough.  457 56 

and  Mechanics'  Bank  v.   Butchers'  and  Drovers'   Bank, 

16  N.  Y.  125 46,  179 

and    Mechanics'    Bank    v.    Empire    Stone    Dressing    Co., 

5  Bosw.  275 46 

and  Merchants'  Bank  v.  Bank  of  Rutherford,  115  Tenn. 

64 56,    90 

National  Bank  v.  Venncr,  192  Mass.  531 95 

Farnsworth  v.  Allen,  4  Gray,  453 loi 

Farquhar  Co.  v.  Higham  (N.  D.)  112  N.  W.  Rep.  557 3,    85 

Far  Rockaway  Bank  v.  Norton,  186  N.  Y.  484 85 

Fassin  v.  Hubbard,  55  N.  Y.  465 54,  121 

Field  V.  Nickerson,  13  Mass.  131 66 

Fifth  Ward  Savings  Bank  v.  First  National  Bank,  48  N.  J.  Law, 

513 69 

Filon  V.  The  Miller  Brewing  Co.,  38  N.  Y.,  St.  Rep.  602 46 

First  National  Bank  v.  Alton,  60  Conn.  402 14 

V.  Buckhannon  Bank,  80  Ind.  475 178 

V.  Bynum,  84  N.  C.  24 10 

V.   Clark,  61  Md.  400 154 

V.   Currie,  147  Mich.  72 179 

V.   Falkenham,  94  Cal.  141 131 

V.   Gay,  63  Mo.  38 10 

V.  Gridlcy,   112  App.   Div.  398 56,  90,  129,  146 

V.  Hall,  44  N.  Y.  395 56 

V.  Harris,   7   Wash.    139 136,  143 

V.  Larscn,  60  Wis.  206 10 

V.  Leach.  52  N.  Y.  350 179 

V.  Maxfield,  83    Me.    576 143 

V.  McCuIlough,   ("Oregon")  93  Pac.  Rrp.  3^16.  .  57 

V.  Michael,  96  N.  C.  53 12 

V.  Moore,  148  Fed.   Rep.  953 78 

V.  Northwestern  National  Bank,  152  111.  296.  179 

V.  Pcltz.   176  Pa.  St.  513 139 

V.  Rickcr,  71  III.  439 82 


XXIV  TABLE    OF    CASES. 

PAGE. 

First  National  Bank  v.  Schrcincr,   no   Pa.   St.   i88. 131 

V.  Wallis,   150  N.  Y.  455 34 

V.  Whitman,  94  U.  S.  343 180 

V.  Wood,  71   N.  Y.  405 109 

of  Champlain  v.  Wood,  128  N.  Y.  35 76 

Danvcrs  7'.  First  National  Bank  of  Salem, 

151  Mass.  280 82 

Hutchinson  v.  Lightner,  74  Kans.  736....  11 
Portland  v.   Linn  County  National   Bank, 

30  Oregon,  296 i 

Union  Mills  v.  Clark,  134  N.  Y.  368 180 

Wymore  v.  Miller,  43   Neb.  791 178 

Firth  V.  Thrush,  8  Barn.  &  Cress,  387 121 

Fisher  v.  Fisher,  98  Mass,  303 40,  43 

Fitchburg  Bank  v.  Greenwood,  2  Allen  434 54 

Fitzgerald  v.  Booker,  96  Mo.  661 40 

Flagg  V.   School   District,  4  N.   D.  30 9 

Flint  V.  Phipps,  16  Oregon,  427 38 

Florence  Alills  Co.  v.  Brown,  124  U.  S.  385 180 

Florence  Oil  Co.  v.  First  National  Bank,  38  Colo.  119 95 

Foland  v.  Boyd,  23  Pa.  St.  476 122 

Folgcr  V.  Chase,  18  Pick.  63 49.  56 

Fonner  v.   Smith,  31    Neb.    107 180 

Fonseca  v.  Hartman,  84  N.  Y.  Supp.  131 128,  132 

Ford  V.  Mitchell,  15  Wis.  304 18 

Fourth  National  Bank  f .  Henschuk,  52  Mo.  207 105,  122 

Street  National  Bank  v.  Yardley,  165  U.  S.  634 180 

Fox  V.  Rural  Home  Co.,  90  Hun,  365 46 

Frampton  v.  Coulson,   i  Wils.  33 95 

Frank  v.  Lillienfcld,  33  Gratt.  377 24,  69 

Franklin  v.  Twogood,   Iowa,  515 50 

Bank  v.  Lynch,  52  Md.  270 I54 

Frazer  v.  D'Quillier,  2  Pa.  St.  200 8 

Freeman   v.    Boynton,   7    Mass.   483 103 

Freeman's  Bank  v.  National  Tube  Works,   151  Mass.  413 52 

Freese  v.  Brownell,  35  N.  J.   Law  285 58 

French  t'.   Bank  of  Columbia,  4  Cranch,   141 134 

V.  Jarvis,  29  Conn.  347 19,  59,  I43 

V.   Turner,    15   Ind.    59 49 

Fridenbcrg  v.    Robinson,    14    Fla.    130 I39,  140 

Friend  v.  Wilkinson,  9  Gratt.   31 125 

I'^uUer  V.  Green,  64  Wis.  159 148 

Fuller  Buggy  Co.  v.  Waldron.  112  App.  Div.  814 127 

Fulton  V.  MacCracken,  18  Md.  528 164 


TABLE    OF    CASES.  XXV 

PAGE. 

Galbraith  v.  Shepard,  43  Wash.  698 96,  109,  ii5 

Garland  v.  Salem  Bank,  9  Mass.  408 130 

Garnett  v.   Woodcock,   i    Starkie,  475 I03 

Garrard  v.  Lewis,  L.  R.  10  Q.  B.  Div.  30 24,    29 

Garvin  v.   Wiswell,  83   111.  218 92 

Gates  V.  Beecher,  60  N.  Y.  518 loi'  ^OS.  123 

Gawkins  :•.  De  Loraine,  3  Wills.  207 12 

Gawtry  v.  Doane,  48  Barb.   148 ^30 

Gaylord  v.  Van  Loan,  15  Wend.  308 I9 

Gennis  v.  Weighley,  1 14  Pa.  St.  194 ^^8 

Georgia  National  Bank  v.  Henderson,  46  Ga.  496 '^77 

German- American  Bank  f.  Cunningham,  97  App.  Div.  244 67,     77 

V.   Mills,  99  App.  Div.  312 5,  97,    98 

V.  Niagara  Cycle  Co.,  13  App.  Div.  450.109,  140 

National  Bank  v.  Foreman,   138  Pa.    St.  474 1^2 

Germania  National     Bank  v.  Mariner,  129  Wis.  544 3i 

T'.  Tooke,  loi  N.  Y.  442 I54 

Gettvsburg  National  Bank  v.  Chisholm,  169  Pa.  St.  564 146,  148 

Gibbs  V.  Guaraglia,  (N.  J.)  67  Atl.  Rep.  81 3,    85 

Giffert  v.  West,  yj  Wis.   115 ^\ 

Gifford   V.    Harden,  88  Wis.   538 i"^ 

Gill  V.    Palmer,   29  Conn.   57 ^  ^9 

Gilley  v.  Harrell,   (Tenn.)   lOi  S.  W.  Rep.  424 i.      9 

Gilmore  v.   Wilbur,   12  Pick.   124 5 

Giovanovich  v.  Citizens'  Bank,  26  La.  Ann.  15 40 

Glaser  v.  Rounds,  16  R.  L  235 ^30 

Gleason  v.  Hamilton,  138  N.  Y.  353 ^47 

Glidden  v.  Chamberlain,  167  Mass.  486 58,    91 

Gloucester   Bank  v.   Worcester,   10   Pick.   528 I39 

Good  V.  Martin,  95  U.   S.  93 ^4 

Goodner  v.  Maynard,  7  Allen,  456 I43 

Goodnow  V.  Warren,   122  Mass.  82 122 

Gordon  v.  Levinc,  194  Mass.  418 74,  100,  I77 

Goshen  National  Bank  v.  Binpham,  118  N.  Y.  349 60,    61 

Gosling  V.  Griffin,  85  Tenn.  yy] 1^3 

Goss  V.   Nelson,   i    Burr.   226 '4 

Gould   V.    Eager,    17   Mass.   615 ^42 

Goupy  V.  Harden.  7  Taunt.  397 '^^ 

Gowan  V.  Jnrkson,  20  Johns.   17^1 ^^ 

Gowdcy  V.  Rohbins,  3   .App.   Div.  353 ^4" 

Grand  Bank  7-.  Blanchard,  23  Pick.  305 '°4 

Grange  v.  Rcigh,  93  Wis.  552 '78 

Grant  v.  Fleming.  46-  Pa.  St.   140 54 

V.  Wood,  12  Gray,  220 ^4 


-> 


xwi  TABLE    OF    CASES. 

PACE. 

Gray's   Adnir.  :•.  Bank  of  Kentucky,  29  Pa.   St.   365 68,    ^-j 

Greenwich  Bank  v.  De  Groot,  7  Hun,  210 13 

Gregg  V.  Bean.  69  Vt.  22 1/8 

Griffin  v.  Erskine,  131  Iowa,  444 57 

Griffiths  v.   Kellogg,  39  Wis.  290 28 

V.  Shipley,  74  Md.  591 78 

Grissom  v.    Commercial   Bank,  87   Tenn.   350 in 

Guano  Company  v.  Marks,  135  N.  C.  59 ^il 

Guarantee  Co.  v.  Craig,  155  Pa.  St.  343 i39 

Guerrant  v.  Guerrant,  7  Va.  Law  Reg.  637 25 

Guild  V.  Goldsmith,  9  Fla.  212 ' 97,    98 

Gunston  v.  Heat  and  Power  Co.,   181   Pa.   St.  327 82 

Haddock,  Blanchard  &  Co.,  Inc.  v.  Haddock,  118  App.  Div.  412.85,    87 

Hagerty  v.  Phillips,  83  Me.  336 93 

Hagey  v.   Hill,  75   Pa.    St.   108 140 

Hague  V.  Davis,  8  Gratt.  4 92 

Haines  v.  Dubois,  29  N.  J.  Law,  259 47 

V.  Merrill,  56  N.  J.  Law,  312 78 

Hale  V.  Danforth,  46  Wis.  554 92,  108 

Halifax  v.  Lyle,  3  Welsby,  H.  &  G.  446 82 

Hall  V.  Auburn  Turnpike  Co.,  27  Cal.  256 46 

V.  Cordell,   142  U.   S.    116 i53 

V.  Toby,   no   Pa.    St.   318 18,     50 

Hallen  v.  Davis,  59  Iowa,  444 24 

Halliday  v.  Hart,  30  N.  Y.  474 140 

V.   McDougall,  20  Wend.   81 163,  165 

Hallowell  v.  Curry,  41   Pa.  St.  322 104 

Haly  V.  Brown,  5  Pa.  St.  178 126,  128,  132,  133 

Hampton  v.  Miller,  78  Conn.  267 97 

Hanover  National  Bank  v.  American  Dock  &  Trust  Co.,  148  N.  Y. 

612 8 

Hansborough  v.  Gray,  3  Gratt.  340 95 

Harger  v.  Wilson,  63  Barb.  237 75 

Harker  v.   Anderson,    21    Wend.    2)1Z ^7^ 

Harmon  v.  Haggerty,  88  Tenn.  705 183 

Harris  v.  Clark,  3  N.   Y.  93 I49,  176 

V.  The  Bank   of  Jacksonville,  20   Fla.   501 146 

Harrison  v.  Ruscoe,  15  L.  H.  Exch.  no;  15  M.  &  W.  231 116 

V.  Nicollet  National  Bank,  41  Minn.  488 176,  i77 

Harrold  v.  Kays,  64  Mich.  439 40 

Hart  V.   Stickney,  41   Wis.  630 64 

Hartford   Bank  v.   Stcdman,  3   Conn.   494 132 

Hartley  v.   Carboy,   150  Pa.    St.  23 146 


TABLE    OF    CASES.  XXVll 

PAGE. 

Haskell   v.   Boardman,  8  Allen,   38 I30 

V.   Brown,  65   111.  29 50 

V.  Jones,  86  Pa.   St.   173 ^^^ 

Hastings  v.  Thompson,  54  Minn.  184 9 

Hawkins  v.  Young,  (Iowa)  1 14  N.  W.  Rep.  1041 79 

Hawley  v.  Jette,   10  Oregon,  31 108 

Hayes  v.   Werner,  45   Conn.  252 97 

Haynes  v.  Birks,  3  Bor.  &  Pul.  599 ^^7 

Heard  v.  Dubuque  Bank,  8  Neb.  10 10 

Hegeman  v.  Moon,  131  N.  Y.  462 I4 

Heise  v.  Bumpass,  40  Ark.  547 3° 

Heist  V.  Hart,  7i  Pa.  St.  286 49 

Henderson  v.  Thornton,  zi  ^liss.  448 83 

Henry  Christian  Building  and  Loan  Association  v.   Walton,    187 

Pa.    St.   201 i'J 

Herdic  v.  Roessler,   109  N.   Y.   127 43.  182 

Herdman  v.  Wheeler,  i  K.  B.  ( 1902)  361 25 

Hereth  v.  Meyer,  Z2>  Ind.  511 12 

Herker  v.  Anderson,  21   Wend.  372 I77 

Herrick  v.  Whitney,    15   Johns.   240 88 

V.  Wolverton,  41    N.    Y.   581 97 

Heuertematte  v.  Morris,  loi   N.  Y.  63 41.    83 

Hewins  v.   Cargill,  67  Me.  554 ^-^8 

Hibbs  V.  Brown,  190  N.  Y.  167 13 

Hibcrnia   Bank  v.  Lacomb,  84  N.   Y.  367 96 

Hickok  V.  Bunting,  92  App.   Div.   167 39 

Higgins  V.  Ridgway,  153  N.  Y.  130 49 

Hill  T'.  Buchanan,  71   N.  J.   Law,  301 I43 

z'.  Farrell,    3    Grccnleaf,    233 132 

V.  Hall,  191  Mass.  253 28 

Hills  V.  Place,  48  N.  Y.  520 95,    96 

Hinckley  r.  Merchants'  National  Bank,   131   Mass.  147 78 

Hinsdale  v.   Miles,  5  Conn.  Z2>^ 167 

Hobbs  V.   Straine,   149  Mass.  212 132 

Hodge  V.  Wallace,    129   Wis.    84 9 

V.  Smith,    130   Wis.   326 6,  26,  49,  68,     ^^ 

Hodges  V.  Shulcr,  22  N.  Y.  114 16,  119 

Hoffman  v.  Planters'  National  Bank  (Va.),  39  S.  E.  Rep.  134 148 

Holbrook  v.  Burt,  22  Pick.  555 5 

Holcomb  V.  Wyckoff,  35  N.  J.  Law,  38 75 

HoMsworth  v.  Hunter.  10  C.  &  B.  449 17-4 

Holmes  v.  Roe,   62    Mich.    199 178 

V.  West,   17  Cal.  623 18 


XXviii  TABLE    OF    CASES. 

PAGE. 

Holtz  V.  Boppe,  37  N.  Y.  634 loi 

Home  Insurance  Company  v.  Green,  19  N.  Y.  518 119 

National   Hank  v.  Newton,  8  Bradwell,  563 Ill 

Savings  Bank  v.  Stewart    (Neb.),   no  N.  W.  Rep.  947 113 

Homer  v.  Wallis,  1 1  Mass.  310 148 

Kook  V.  Pratt,  78  N.  Y.  371 52 

Hopkinson  v.   Foster,  L.   R.    18   Eq.   74 ^7^^  i^o 

Hotchkiss  V.  First  National  Bank,  21  Wall.  354 78 

V.  Fitzgerald  Patent  Etc.  Co.,  41  W.  Va.  357 4° 

House  V.  Vinton  Bank,  43  Ohio  St.  346 123 

Howard  v.  Boorman,    17  Wis.  459 46,    95 

V.  Ives,   I   Hill,  263 126,  127 

Howe  V.  Merrill,  15  Cush.  88 92 

Howland  v.  Adrian,  29  N.  J.  Law,  41 119.  126,  132 

V.  Carson,  15  Pa.  St.  453 ^55 

Hubbard  v.  Gurney,  64  N.  Y.  450 I39 

V.   Matthews,  54  N.   Y.  43 122 

HufT  T'.   Wagner,  63  Barb.  230 75 

Huffuker  v.  National  Bank,  12  Bush.  293 164 

Hughes  V.  Large,  2   Pa.    St.    103 76 

Humphreys  v.  Sutcliffe,  192  Pa.  St.  336 104 

Hungerford   v.    O'Brien,   37    Minn.    306 II5 

Hunter  v.  Hook,  64   Barb.   469 130 

V.  Van  Bomhurst,  i   Md.  504 1 19 

Hutchinson  v.  Boggs  &  Kirk,  28  Pa.  St.  294 78 

Hutchison  v.   Crutcher,  98  Tenn.   421 104 

Industrial  Bank  of  Chicago  v.  Bower,  165  Til.  70 178 

Trust  Title  and  Savings  Co.  v.  Weakley,  103  Ala.  458. .   178 

Ingalls  V.  Lee,  9  Barb.  647 58 

Ingersoll  v.  Martin,  58  Md.  67 43 

In  re  Bishops'  Estate,  195  Pa-  St.  85 I39 

Brown,   2   Story,   502 176 

Swift,    106   Fed.    Rep.   65 134 

Insurance  Company  v.  Wilson,  29  W.  Va.  543 9^ 

Iron    City   National    Bank  v.    Fort   Pitt   National   Bank,    159   Pa. 

St.  46 82 

Iron  City  National  Bank  v.  Rafferty,  207  Pa.   St.  238 31 

Irving  National  Bank  v.  Alley,  79  N.  Y.  536 176 

Ivory  V.  Bank  of  the  State,  36  Mo.  475 '^77 

Jackson  v.  Myers,  43  Md.  452 i7 

V.   Richards,  2  Caines,  343 108 

James  v.  Brown,   1 1   Ohio,  601 18 

Jameson  v.   Swinton,  2  Taunt.  224 126 

Jamieson  v.  McFarland,  43  Wash.    153 36 


TABLE    OF    CASES.  XXIX 

PAGE. 

Jarnigan  v.  Stratton,  95  Tenn.  619 123 

Jarvis  v.   Manhattan  Beach  Co.,   148  N.  Y.  652 69 

V.  St.  Croix  Manufacturing  Co.,  23  Me.  287 125 

V.  Wilson,  46  Conn.  91 I49.  I54 

Jeffrey  v.  Rosenfeld.  179  Mass.  506 I45 

Jenkins  v.  Schnaub,  14  Wis.  i 4° 

V.  White,  147  Pa.  St.  303 130 

Jenkinson  v.  Wilkinson,  no  N.  C.  532 60 

Jennison  v.  Stafford,  i  Cush.  168 43 

Jerman  v.  Edwards,  29  App.  Cases,  D.  C.  535 59,    60 

Johnson  v.  Brown,   154  Alass.   105 126,  165 

V.  Buffalo   Center   State  Bank    (Iowa),    112   N.   W.   Rep. 

165 57 

V.  Clark,  39  N.  Y.  216 i54 

V.  Mitchell,  50  Tex.   212 55 

V.  Ramsay,  43  N.  J.  Law,  279 93 

Jones  V.  Council  Bluffs  Branch,  etc.,  34  111.  3U ^53 

V.  Darch,  4   Price,  300 82 

V.  Home  Furnishing  Co.,  9  App.  Div.   103 81 

V.  Roberts,  191  Pa.  St.   152 130 

V.  Rodetz,  27  Minn.  240 10 

Jordan  t'.  Grover,    99    Cal.    194 78 

V.  Tate,   19  Ohio  St.  586 I4 

Joseph  V.  Solomon,  19  Fla.  623 163 

Joy  V.  Diefendorf,  130  N.  Y.  6 78 

Joyce  V.  Realm  Insurance  Company,  L.  R.  7  Q.  B.  580 30 

Judah  V.  Harris,  19  Johns.  144 18 

Jurgens  v.  Wichmann,  108  N.  Y.  Supp.  881 127 

Kaschncr   v.    Conklin,   40   Conn.   81 ^44 

Kcene  v.  Behan,  40  W^lsh.  505 68,  77.    78 

Keith  V.  Jones,  9  Johns.    120 I7 

Kelley  v.  Brown,  5  Gray,  108 130 

V.  Whitney.  45  Wis.  no 64 

Kelly  V.   Burroughs,   102  N.   Y.  93 92,  I44 

Kenworthy  v.  Sawyer,  125  Mass.  28 140 

Kerby  v.  Rucgamcr,   T07   .'Kpp.  Div.  491 34 

Kerr  v.  Anderson  (N.  D.),  ni  N.  W.  Rep.  614 77 

Keyes  v.  Feustomachcr,  24  Cal.  329 18 

Kilcresse  v.  White,  6  Fla.  45 7^ 

Kilgore  v.  Bulklcy.   14  Conn.  362 n8 

Kimball    v.    Bryan,   56   Iowa,   632 106 

King  V.  Doane,    139  U.    S.    166 78 

7'.    Holmes,    11    Pa.    St.   4.56 102 

Kingslcy  v.  Sampson,  100  III.  54 3° 


XXX  TABLE    OF    CASES. 

PAGE. 

Kinney  v.  Kruse,   28  Wis.    183 68,  77,  79 

Kinsley  v.  Robinson,  21  Pick,  i2^ 106 

Kirschncr  v.  Conklin.  40  Conn.  •]^ 92 

Kiskadden  r.  Allen,  7  Colo.  206 14 

Kniss  V.  Holbrook,  16  Ind.  App.  229 183 

Knox  V.  Eden  Musec  American  Co.,  148  N.  Y.  454 69 

Koehning  v.  Muemminghoff,  61  Mo.  403 19 

Kohn  V.  Consolidated  Butter  and  Egg  Co.,  30  Misc.  (N.  Y.)  725.  .  85 

Konig  V.  Bayard,  i  Pet.  250 171 

Kunkel  v.  Spooner,  9  Md.  462 62 

Ladd  V.  Franklin,  37  Conn.  64 69 

Lake  Shore  National  Bank  v.  Butler  Colliery  Co.,  51  Hun,  63 121 

Lambert  v.   Pack,   i    Salk.   127 91 

Land,  etc.,  Co.  v.  Northwestern  Nat.  Br.nk,  196  Pa.  St.  230 37 

Lane  v.  Stacy,  8  Allen,  41 93 

Lassas  v.  McCarty,  47  Ore.  474 38,  75 

Laubach  v.  Pursell,  35  N.  J.  Law,  434 I43 

Lawrence  '■.  Miller,  16  N.  Y.  235 116,  117 

Lawson  v.  First  National  Bank,  102  S.  W.  Rep.  324 "71 

Lazier  v.  Horan,  55  Iowa,  'j'j 96 

Leask  v.  Dew,  102  App.  Div.  529 I44.  ^45 

Leather  Manufacturers'  National  Bank  v.  Morgan,  117  U.  S.  96..  ■  2,7 

Leavitt  v.  Putnam,  i  Sandf.   190   19 

3  N.  Y.  494  5 

Legg  V.  Vinal,  165  Mass.  555 103,  135.  165 

Lehigh  Valley  Coal  v.  West  Depere  Agr.  Works,  63  Wis.  45..  46 

Leidy  v.  Tammany,  9  Watts,  353 98 

Lenheim  v.  Wilmarding,  55  Pa.  St.  73 44 

Lenox  v.  Roberts,  2  Wheat,  2ns 123 

Leonard  v.  Draper,  187  Mass.  536 87,  90 

Levins  v.  Briggs,  21  Oregon,  2>'hi ^o 

Levy  V.  Ford,  41  La.  Ann.  873 40 

Lewis  V.  Brehme,  ZT,  Md.  412 129 

Lewisohn  v.  The  Kent  and  Stanley  Co.,  87  Hun,  257 21 

Libby  v.  Mekelborg,  28  Minn.  38 18 

Life  Insurance  Company  v.  Pendleton,  112  U.  S.  696 106,  134,  150 

Light  V.  Kingsbury,  50  Mo.  331 19 

Lindeman's  Exr.  v.  Guildin,  34  Pa.  St.  54 122 

Lindsay  v.  Price,  Z2>  Tex.  280 50 

Lindsey  v.  McClelland,   18  Wis.  481 18,  98 

Lines  v.  Smith,  4  Fla.  47 38 

Linn  v.  Horton,  17  Wis.  150 1 17,  126 

Littauer  v.  Goldman,  72  N.  Y.  506 88,  89 


-> 


TABLE    OF    CASES.  XXXI 

PAGE. 

Lloyd  V.  Oliver,  18  Q.   B.  471 30 

V.  Osborne,  65  N.  W.  Rep.  859 178 

z:  Sigourncy,  5  Bing.  252 ;  3  M.  P.  229 52 

Lockwooa  z:  Crawford,  18  Conn.  361 96,  103,  130,  UO 

Logan  f.  Ogden,  loi  Tenn.  392 84 

Loizeaux  v  Fremder,  123  Wis.  193 112,  113 

Lomax  z:  Picot,  2  Rand.  260 54 

Lombard  v.  Byrne,  194  Mass.  236 39 

Long  V.  Rhawn,  75  Pa.  St.  128 "6 

Lookout  Bank  v.  Aull,  93  Tcnn.  645 56 

Lord  V.  Ocean  Bank,  20  Pa.  St.  384 45>    80 

Losee  z:  Bissell,  76  Pa.  St.  459,  462 63 

V.  Durkin,  7  J.  R.  70 67 

Louisville  R.  R.  Co.  z'.  Caldwell.  98  Ind.  251 38 

Loux  V.  Fox,  171  Pa.  St.  68 178 

Low  v.  Howard,   10  Cush.   159 109,  129,  130 

II    Cush.  268 130 

Lowell  Trust  Co.  z'.  Pratt,  183  Mass.  379 128 

Lowery  v.  Steele,  27  Ind.  168 i 

v.  Steward,  25  N.  Y.  239 ^- 

Lyon  z'.  Ewings,  17  Wis.  61 54 

v.  Phillips,  ic6  Pa.  St.  57 ^7 

MacDonald  v.  Whitfield,  L.  R.  8  .\pp.  Cas.  733 93 

Mackay  z:  St.  Mary's  Church,  15  R.  L  121 I7 

MacLeod  v.  Luce,  2  Stra.  762 ;  2  Ld.  Raym.  1481 11 

Madison  Square  Bank  v.  Pierce,  137  N.  Y.  444 55,  U7 

Magee  v.  Lovcll,  L.  R.  9  C  P.  107 30 

Maginn  v.  Dollar  Savings  Bank,  131  Pa.  St.  362 180 

Magoon  v.  Rebcr,  76  Wis.  392 68 

Maitland  v.  Citizens'  National  Bank,  40  Md.  540 40 

Mar.deville  v.  Welsh,  5  Wheat.  286 I49 

Manufacturers',  etc..  Bank  v.  Love,  13  App.  Div.  561 32 

Marine  National  Bank  v.  National  City  Bank,  59  N.  Y.  67 81 

Market  and  Fulton  National  Bank  v.  Sargent,  85  Me.  349 78 

Markey  v.  Corey,  108  Mich.  184 9,     54 

Marks  v.  Boone,  24  Fla.  I77 "5,  124 

Marling  v.  Nommcnsen,  127  Wis.  363 63,  113 

Marsh  z:  Marshall,  53  Pa.  St.  396 64 

Marshall  z:  Burnby,  25  Fla.  619 '57 

V.  Sonneman,  216  Pa.  St.  65 118 

Martin  7'.  Bank,  94  Tcnn.  176 40 

V.  Tngcrsoll,  8  Pick,  i '33 

7:  Stone.  67  N.  H.  3f^7 '4 

Maryland  Fertilizing  Co.  v.  Newman,  60  Md.  584 10 


XXxii  TABL1-:    OF    CASES. 

PAGE. 

Mason  f.  Frick,   105  Pa.  St.   162 17 

I'.  Kilcourse,  71   N.  J.  Law,  472 165 

V.  Noonan,  7  Wis.  609 S8 

Maspcro  r.  Pcclesclaux.  22  La.  Ann.  227 122 

Massachusetts  Bank  v.  Oliver,  10  Cush.  557 122 

National  Bank  v.  Snow,  187  Mass.  T59-22,  28,  71,   I47 

Matlock  V.  Schcucrman  (Ore.)  93  Pac.  Rep.  825 66,  70,     78 

Matteson  v.  Moulton,  79  N.  Y.  627 I5S 

Mattison  v.  Marks.  31  Mich,  421 14 

Maule  V.  Crawford,  14  Hun,  193 20 

Maxwell  v.  Agnew,  21  Fla.  154 176 

Mayer  v.  Jadis,  i  IVI.  &  Rob.  247 60 

Mayers  v.  McRimmon,  140  N.  C.  640 5°,    60 

J^IcBride  v.  Farmers'  Bank,  26  N.  Y.  450 40 

]\IcCarty  v.  Roots,  21  How.  (U.  S.)  432 92 

McCaughcy  v.   Smith.  27  N.  Y.  39 148 

McConcghy  v.  Kirk,  68  Pa.  St.  200 91 

McCormick  v.  Shea,  50  Misc.  592 I45.  146 

McDaniel  v.  Pressler,  3  Wash.  636 53 

McDonald  v.  Magruder,  3  Peters,  470 92 

McFarland  v.   Sikes,  54  Conn.  250 49 

McKim  V.  King,  58  Md.  502 64,    67 

:\IcKnight  v.  Parsons  (Iowa),  113  N.  W.  Rep.  858 65,  77,    78 

McLeod  V.  Hunter,  29  Misc.  558 19 

McSherry  v.  Brooks,  46  Md.  103 59 

McWherter  v.  Jackson,  10  Humph.  208 33 

Mead  v.  Engs,  5  Cow.  303 127 

Mechanics'  Bank  v.  Griswold,  7  Wend.   165 109,  130 

v.  Merchants'  Bank,  6  Mete.   13 104 

V.  Stratton,  2  Keyes,  365 22 

and  Traders'  Bank  v.  Seitz,  150  Pa.  St.  632 112 

Megowan  v.  Peterson,  173  N.  Y.  i 34 

Mehlenger  v.  Harriman,   185  Mass.  245 66 

Melton  V.  Brown,  25  Fla.  461 84 

Mercer  County  v.  Hackett,  i  Wall.  83 17 

V.  Lancaster,  5  Pa.  St.  160 127 

Merchants'  Bank  v.  Birch,  17  Johns.  24 122 

V.  Griswold,  72  N.  Y.  472 154 

V.  State  Bank,  10  Wall.  604 176,  i79 

of  Canada  v.  Brown,  86  App.  Div.  599 122 

Nat.  Bank  v.  Haverhill  Iron  Works,  159  Mass.  158 78 

Meriden  National  Bank  v.  First  National  Bank,  7  Ind.  App.  322..   I79 

V.  Gallaudet,  120  N.  Y.  298 88,    93 

Merritt  v.  Todd,  23  N.  Y.  28 97 


TABLE    OF    CASES.  XXXlll 

PAGE. 

Mersick  v.  Alderman,  yj  Conn.  634 43 

Merz  V.  Kaiser,  20  La.  Ann.  379 60 

Messmore  v.  Morrison,  172  Pa.  St.  300 18 

Aletropolitan  Bank  v.  Jones,  137  111.  634 179 

Meuer  v.  Phenix  National  Bank,  42  Misc.  341 60,  61 

94  App.  Div.  331 179 

Meyer  v.  Beardslej-,  29  N.  J.  Law,  236 152 

V.  Richards,  163  U.  S.  385 88,  89 

Meyers  v.  Standart,  1 1  Ohio  St.  29 156 

M.  Groh's  Sons  Co.  v.  Schneider,  34  Misc.  (N.  Y.)   195 78 

Middleborough  National  Bank  v.  Cole,  191  Mass.  168 45 

Middleton  v.  Griffith,  57  N.  J.  Law,  442 49 

Milius  V.  Kauffman,  104  App.  Div.  442 39 

Miller  v.  Gilleland,  19  Pa.  St.   1 19 148 

V.  Hannibal  &  St.  Jo.  R.  R.  Co.,  90  N.  Y.  430 30 

V.  Kreiter,  76  Pa.  St.  78 136 

V.  Reynolds,  92  Hun,  400 2Z 

Mills  V.  Bank  of  U.  S.  1 1  Wheat.  431 1 19,  120 

Mingus  V.  Condit,  23  N.  J.  Eq.  313 39 

Minir  v.  Crawford,  L.  R.  2  Scotch  Appeals,  456 140 

Minot  V.  Russ,  156  Mass.  458 I79 

Minturn  v.  Fisher,  4  Cal.  36 I77 

Mitchell  V.  Baldwin,  88  App.  Div.  265 77 

V.  Culver,  7  Cow.   336 23 

V.  Fuller,  15  Pa.  St.  268 55 

Moggridge  v.  Jones,   14  East.  485 44 

Mohlman  Co.  v.  McKanc,  60  App.  Div.  546 133 

Monson  v.  Drakely,   40  Conn.  559 31 

Montgomery  v.  Crossthwait,  90  Ala.  553 9 

County  Bank  v.  Marsh,  7  N.  Y.  481 128 

Montrose  Savings  Bank  v.  Claussen  (Iowa),  114  N.  W.  Rep.  547- •  65 

Monument  Nat.  Bank  v.  Globe  Works,  loi  Mass.  57 46 

Moore  v.  Alexander,  63  App.  Div.  100 109,  130 

V.  Baird,  30  Pa.  136 75 

V.  Hardcastlc,  1 1   Md.  486 128 

Moorhcad  v.  Gilmore,  77  Pa.  St.  1 18 69 

Moreland's  Assignee  v.  Citizens'  Savings  Bank,  97  Ky.  211 166 

Morford  v.  The  Farmers'  Bank  of  Saratoga  County,  26  Barb.  568.  46 

Morgan  v.  Edwards,  53  Wis.  599 10 

V.  Thompson.  72  N.  J.  Law,  244 9.3 

Morganton  v.  Hay,  143  N.  C  326 154 

Morris  v.  Cudc,  57  Tex.  337 60 

Canal,  etc.,  Co.  v.  Fisher,  9  N.  J.  Eq.  699 17 

2 


XXXIV  TABLE    OF    CASES. 

X>ACE. 

Morrison  v.  Bailey.  5  Ohio  St.   13 I77 

Lumber  Co.  v.  Lookout  Mt.  Hotel  Co.,  92  Tcnn.  6 92 

Morse  v.  Huntington,  40  Vt.  488 140 

Morton  v.  Naylor,    i    Hill   583 12 

V.  N.  A.  &  Selma  Ry.  Co.,  79  Ala.  590 69 

Moskowitz  r.  Dcutsch,  46  Misc.  603 146,  147,  177 

Mott  v.  Havana  National  Bank,  22  Hun,  354 12 

Moyer  &  Brother's  Appeal.  87  Pa.  129 108 

Mudd  V.  Harper,  I  Md.  no 19,  96 

Munger  v.  Shannon.  61  N.  Y.  25 1 11,  12,  149 

Munn  t'.  Burch,  25  111.  35 180 

Murray  v.  Judah.  6   Cow.  484 176 

V.  Lardner,  2  Wall,  no 69,  78 

Musson  v.  Lake,  4  How.  262 103 

Mutli  7'.  Dolfield,  43  Md.  466 117 

Myrick  v.  Merritt,  22  Fla.  335 i57 

Nailor  v.  Bowie.  3  Md.  251 102 

Nash  V.  De  Freville  (1900),  2  Q.  B.  72 138 

National  Bank  v.  Cade,  73  Mich.  449 127 

V.  Cole,  191  Mass.  168 45 

V.  Shaw,  79  Me.  376 126 

V.  Sutton  Manufacturing  Co.,  6  U.  S.  App.  312 9 

of  America  v.  National  Bank  of  Illinois,  164  111.  503.  180 
of  Commerce  v.  Atkinson,  55  Fed.  Rep.  465,  2y  U. 

S.  App.  88   46 

of  Commerce  v.  Pick,  13  N.  D.  74 74 

of  Newport  v.  Snyder  Manufacturing  Co.,  117  App. 

Div.  370  46,  47 

of  North  America  v.  Bangs,  106  Mass.  441 82 

of  Phoenixville  v.  Buckwalter,  214  Pa.  St.  289 80 

of  Republic  v.  Young,  41  N.  J.  Eq.  531 69 

of  Washington  v.  Texas,  20  Wall.  72 59 

Butchers'  and  Drovers'  Bank  7/.  Hubbcll,  117  N.  Y.  384..  52 
Citizens'   Bank  v.  Toplitz,  81   App.   Div.   593,    178   N.   Y. 

.466 142 

Exchange  Bank  v.   Cumberland  Lumber   Co.,    100  Tenn. 

479 84 

Exchange   Bank  v.    Hartford    P.    &   E.    R.    Co.,   8   R.   L 

375 8,  17 

Exchange  Bank  v.  Lubrano,  68  Atl.  Rep.  944 83,  176 

National  Park  Bank  v.  German-American    M.   W.   &    S.   Co.,    116 

N.  Y.  281 46,  71 

V.  Ninth  National  Bank,  46  N.  Y.  77 81 

V.  Seaboard  National  Bank,  114  N.  Y.  28 90 


TABLE    OF    CASES.  XXXV 

PAGE. 

National  Revere  Bank  v.  Morse,  163  Mass.  381 40,  68,  78 

Savings  Bank  v.  Cable,  72>  Conn.  568 12 

Ulster  County  Bank  v.  Madden.  114  N.  Y.  280 147 

Union  Bank  v.  Todd,  132  Pa.  St.  312 40 

Nelson  v.  Cowing,  6  Hill,  2,33 64 

V.  First  National  Bank,  69  Fed.  Rep.  798 166 

29  U.  S.  App.  554 120 

New  V.  Walker,   108  Ind.  365 183 

Ncwcombe  v.  Fox,   i  App.   Div.  389 28,  62 

New  Haven  Mfg.  Co.  v.  New  Haven  Pulp  and  Board  Co.,  76  Conn. 

126 59 

Newell  V.  Gregg,  51  Barb.  253 64 

Newhall  v.  Clark,  3  Cush.  376 157 

Newman  v.  King,  54  Ohio  St.  272, 148 

New  York  &  N.  H.  R.  R.  Co.  v.  Schuyler,  34  N.  Y.  30 154 

Nevins  v.  Townsend,  6  Conn.  7 66 

Niagara  Bank  v.  Fairman  Co.,  31  Barb.  403 156 

Nichols  V.  Ruggles,  76  Me.  27 11 

Nightingale  v.  Meginnis.  34  N.  J.  Law,  461 139 

Northampton  National  Bank  v.  Kidder,  106  N.  Y.  221 78 

North  Atchinson  Bank  v.  Garretson,  51  Fed.  Rep.  167 153,  154 

Northfield  National  Bank  v.  Arndt  (Wis.),  112  N.  W.  Rep.  451 65 

Northwestern  Coal  Co.  v.   Bowman,  69  Iowa,   150 5,  127,  176 

National  Bank  v.  Bank  of  Commerce,  107  Mo.  402. .  52 

Norton  v.  Ellam,  2  M.  &  W.  461 95 

Norwich  Bank  v.  Hyde,  13  Conn.  281 24,  26,  29 

Ocean  National  Bank  r.  Fant.  50  N.  Y.  474,  476 103 

V.  Williams,   102   Mass.    141 166 

O'Connor  v.  Mechanics'  Bank,  124  N.  Y.  324 180 

Ofenstcin  v.  Bryan,  20  App.  Cases  D.  C  i 146 

Olry  V.  Miller,  74  Conn.  304 98 

Oppenhcimer  v.  Farmers'  and  Mechanics'  Bank,  97  Tenn.  19. . .  .9,  75 

Oriental  Bank  v.  Gallo,  1 12  App.  Div,  360 90 

Orr  V.  South  Amboy  Terra  Cotta  Co.,  1 13  App.  Div.  103 71 

Osborne  v.  Hubbard,  20  Oregon,  318 17 

Otis  V.  Cullum,  92  U.  S.  448 89 

Overton  v.  Tyler,  3  Pa.  St.  346 16 

Ovrick  V.  Colston,  7  Gratt.   189 24 

Oxford  Bank  v.  Davis.  4  Cush.  188 160 

Oxnard  v.  Varnum.   1 1  r   Pa.  St.  193 102 

Pacific  Bank  v.  Mitchell,  9  Met.  297 i37 

Packard  v.  Dimfce,  i  rg  App.  Div.  (N.  Y.)  599 9' 

V.  Wrndholz,  88  App.  Div.  365;  180  N.  Y.  549 45.  90 

Page  V.  Moncll,  3  Abb.  Ct.  App.  Dec.  433 23 


XXXVl  TABLE    OF    CASES. 


PAGE. 

Paine  r.  Central  Vermont  R.  R.  Co.,  ii8  U.  S.  152 97 

V.  Edscll,  19  Pa.  St.  178 121,  146 

Pardee  v.  Fish,  60  N.  Y.  265 97 

Parker  -•.  City  of  Syracuse,  31  N.  Y.  376 12 

Parker  z\  Gordon,  7  East.  387 103 

V.  Kellogg,  158  Mass.  90 102 

V.  Stroud,  98  N.  Y.  379 96,  97 

Parks  V.  Smith,  155  Mass.  26,  33 130 

Parr  z'.  City  Trust  Co.,  95  Md.  291 109 

Passmore  v.  North,  13  East.  517 22 

Patch  V.  Washburn,  82  Mass.  82 92 

Patterson  i-.  Todd,  18  Pa.  St.  420 19,  59 

Payson  z'.  Whitcomb,  15  Pick.  212 95 

Peach  z'.  Bligh,  37  111.  317 50 

Pearce  v.  Langfit,  loi  Pa.  St.  507 126 

Peason  7>.  Garrett,  4  Mod.  242 14 

People's  Bank  v.  Brooke,  31  Md.  7 165 

V.  Franklin  Bank,  88  Tenn.  299 82 

z'.  Kcech,  26  Md.  521 104 

National  Bank  z'.  Schepflin,  y^  N.  J.  Law.  29 45 

Savings  Bank  v.  Bates,  120  U.  S.  556 39 

Perez  v.  Bank  of  Key  West,  36  Fla.  467 136 

Perry  v.  Bigclow,   128  Mass.  129 15 

Persons  z>.  Hawkins,  41   App.  Div.   171 49 

V.  Kruger,  45  App.  Div.  187 121 

Phelan  v.  Moss,  67  Pa.  St.  59 69 

Phelps  V.  Stocking,  21    Neb.  444 124 

V.  Vischer,  50  N.  Y.  69 84 

Phillips  V.  Astberg,  2  Taunt.  206 loi 

V.  Dippo,  93  Iowa,  35 131 

V.  Preston,  5  How.   (U.   S.)  278 92 

Phoenix  Bank  v.  Hussey,  12  Pick.  483 150,  163 

Insurance  Co.  v.  Allen,  11  Mich.  30 160 

Pickle  v.  People's  National  Bank,  88  Tenn.  380 180 

Pier  V.  Heinrichsoffcn,  67  Mo.   163 106,  125 

Pierce  z'.  Indseth,   106  U.  S.  546 165 

V.  Struthers,  27  Pa.  St.  249 102 

Pine  V.  Smith,  11  Gray,  38 64 

Pitts  z:  Jones,  9  Fla.  519 134 

Place  v.  Mcllvain,  38  N.  Y.  96 139 

Planters'  Bank  v.  Evans,  36  Tex.  592 133 

z'.  Keese,  7  Heish,  200 176 

Piatt  c'.  The  Sauk  County  Bank,  17  Wis.  222 18 

Plover  Savings  Bank  v.  Moodie,  (Iowa)   no  N.  W.  Rep.  29 99 


TABLE    OF    CASES.  XXXVll 

PAGE. 

Poole  V.  Tolleson,  i  McCord,  200. 19,     59 

Porter  v.  Judson,   i   Gray,   175 165 

V.  Porter,  51   Me.  376 18 

Power  V.  Mitchell,  7  Wis.  159 108,  109 

Prescott  Bank  v.  Coverly,  7  Gray,  216 5,  91,  160 

National  Bank  v.  Butler,  157  Mass.  548 91 

Preston  v.  Mann,  25  Conn.  127 59 

Price  V.  Jones,  105  Ind.  544 144 

Pulsifer  v.  Hotchkiss,  12  Conn.  234 44 

Purcell  V.  Allemong,  22  Gratt.  739 178 

Quiggle  z:  Herman,  131  Wis.  379 74,  184 

Quimby  v.  Varnum,  190  Mass.  211 142 

Quinn  v.  Hoord,  43  Vt.  375 40 

Railroad  Company  v.  National  Bank,  102  U.  S.  14 40 

Rand  v.  Dovey,  83  Pa.  St.  281 60 

V.  Reynolds,  2  Gratt.   171 128 

Ranger  v.  Cory,  i  Mete.  369 66 

Raymond  v.  Sellick,   10  Conn.  485 19,     39 

Redlich  v.  Doll,  54  N.  Y.  238 2^,    25 

Redman  v.  Adams,  51  Me.  433 11 

Reed  v.  Spear,  107  App.  Div.   144 105,  132 

V.  Wilson,  41  N.  J.  Law,  29 103 

Regester's  Sons  Co.  v.  Reed,  185  Mass.  226 77 

Regina  Flour  Mill  Co.  v.  Holmes,  156  Mass.  i  r 53 

Rcier  z:   Straus,  54  Md.  278 165 

Reilly  v.  Daly,  159  Pa.  St.  605 149 

Reincke  v.  Wright,  93  Wis.  368 108 

Reinhart  z:  Schall,  69  Md.  352 92,  93,  143 

Reynolds  v.  Appleman,  41  Md.  615 164 

Rice  V.  Grange,   131   N.  Y.   149 44,    45 

V.  Rice,  43  App.  Div.  (N.  Y.)  458 14 

Rickets  v.  Pendleton,  14  Md.  320 49,  102,  135,  165 

Kidgcley  Bank  r.  Palton,  109  111.  484 176 

Rikcr  V.  Sprague  Manufacturing  Co.,  14  R.  I.  402 14 

Riverside  Bank  z'.  Woodhaven  June.  L.  Co..  34  App.  Div.   (X.  Y.) 

362 38 

Roach  t'.  Osfkr,  i  Man.  &  Ry.  120 133 

7'.  Wondali,  91   Tcnn.  206,  Wisconsin ^o,     42 

Roberts  v.  I  lall,  ,-^7  Conn.  205 40 

V.  Hawkins.  70  Mich.  566 115 

V.  McGrath.  38  Wis.  52 28 

V.  Parish.   17  Oregon.  583 53 

V.  Snow,  28  Neb.  425 19 


XXXVIII  TABLE    OK    CASES. 

PAGE. 

Robertson  t-.  Brcodlonc,  7  Porter,  541 76 

z:  Kensington,  4  Taunt.  30 55 

Robins  z>.  Lair,  31   Iowa,  9 40 

Robinson  z'.  Ames,  20  Johns.   146 160 

V.  Barnett,  19  Fla.  670 129 

V.  Lymon,   10  Conn.  31    76 

Robson  V.  Bennett.  2  Taunt.  388 117 

Rock  County  National  Bank  v.  Hollister,  21  Minn.  385 53 

Rockfieki  z:  First  National  Bank  of  Springfield,   (Ohio)  83  N.  E. 

Rep.    39^    3.     85 

Rockville  National  Bank  z'.  Citizen's  Gas  Light  Co.,  72  Conn.  576.     40 

V.  Holt,  58  Conn.  526 140 

Rogers  z'.  Durrant,  140  U.  S.  298 176 

V.  Siplcy,  35  N.  J.  Law,  86 47 

V.  Squires,  98  N.   Y.  49 42 

V.  Vosburgh,  87  N.  Y.  208 148 

Rome  z'.  Young,  2  Brod.  &  Bing.  165 ;  2  Bligh.  391 157 

Rosemon  v.  IMahoncy,  86  App.  Div.  377 42 

Ross  V.  Bedell,  5  Duer,  462 134 

V.  Hurd,  71  N.  Y.  14 108,  129 

Rosson  V.  Carroll,  90  Tenn.  90 19,  59,  118,  124,  165 

Rouse  V.  Wooten,  140  N.  C.  557 4 

Rouvant  z'.  San  Antonio  National  Bank,  63  Tex.  610 82 

Rovicz  V.  Nickells,  9  N.  D.  536 77 

Rowland  z'.  Fowler,  47  Conn.  349 75 

Ruiz  V.  Renauld,  100  N.  Y.  256 154 

Rumball  r.  Ball.  10  Md.  38 95 

Russ  V.  Sadler,  197  Pa.  St.  51 92 

Russell  V.  Langstaffe,  2  Doug.  514 24 

Salen  v.  Bank  of  the  State  of  New  York,  no  App.  Div.  636 36 

Salmon  z'.  Hopkins,  61  Conn.  47 57 

Salt  Springs  National  Bank  z:  Burton,  58  N.  Y.  430 loi,  103 

Sanderson  v.  Sanderson,  20  Fla.  292 124 

Sargent  v.  Southgate,  5  Pick.  312 64 

Sasscer  v.  Farmers'  Bank,  4  Md.  409 118,  125 

V.  Stone,  ID  Md.  98 102 

Saunderson  v.  Piper,  5  Bing.  N.  C.  425 29 

Savior  V.  Bushong,  100  Pa.  St.  27 180 

Schaeffer  v.  Fowler,   1 1 1   Pa.   St.  45 1 40 

Schierl  7'.  Vaumcl,  75  Wis.  75 130 

Schlesinger  v.  Gilhooly,   189  N.  Y.  i 73 

V.  Kelly,   1 14  App.  Div.  546 73 

V.  Lehmaicr,   191   N.  Y.  69 72 

V.  Schultz,  1 10  .App.  Div.  356 98,  104 


TABLE    OF    CASES.  XXXIX 

PAGE. 

Schmittlcr  v.  Simon,  loi  N.  Y.  554 n.  57 

Schreyer  v.  Hawkes,  22  Ohio  St.  308 ' 24,  29 

Schroeder  v.  Turner,  68  Md.  506 84 

Schwartzman  v.  Post,  94  App.  Div.  474 ^37 

Scott  V.  Pilkington,  15  Abb.  Pr.  280 154 

Scudder  t:  Union  National  Bank,  91  U.  S.  406 I53,  i54 

Seaton  v.  Scoville,  18  Kans.  433 9.  1-26 

Seattle  Shoe  Co.  v.  Packard,  43  Wash.  527 32 

Seaver  v.  Lincoln,  21  Pick.  267 97 

Second  National  Bank  of  Aurora  v.  Basuier,  65  Fed.  Rep.  58 9 

V.  Anglin,  6  Wash.  403 10 

V.  Morgan,  165  Pa.  St.  199 69 

z'.  Smith,  118  Wis.  18 118 

Sedgwick  v.  AIcKim,  53  N.  Y.  307 26 

Seldner  v.  Mount  Jackson  National  Bank,  66  Md.  488 108,  122 

Self  V.  King,  28  Tex.  552 i9 

Seltzer  v.  Deal,  135  N.  C.  428 69 

Serle  v.  Norton,  9  M.  &  W.  309 23 

Shaw  V.  Camp,  160  111.  425 14 

V.  Knox,  98  Mass.  214 92 

V.  Pratt,  22  Pick.  305 ^37 

Shawmut  National  Bank  v.  Manson,  168  Mass.  425 39,  65 

Shedd  V.  Brett,  i  Pick.  401 100,  119,  126 

Shelburne  Falls  National  Bank  v.  Townsley,  102  Mass.  177 126 

107  Mass.  444 128 

Sheldon  v.  Bcnhani,   4    Hill,    129 120 

V.  Heaton,  88  Hun,  535 ^9 

Shenandoah  National  Bank  v.  Marsh,  89  Iowa,  273 9 

Shepard  v.  Chamberlain,  8  Bray,  225 103 

Shcpard  v.  Hauson,  9  N.  D.  249 63 

V.  Hawlcy,  i  Conn.  367 122 

Sherer  v.  Easton  Bank,  33  Pa.  St.  134 123,  165 

Sherman  v.  Goodwin,  (  Ariz.)  89  Pac.  Rep.  517 176 

Shipman  v.  Bank  of  the  Slate  of  New  York,  126  N.  Y.  318 20 

Shires  v.  Commonwealth,  120  Pa.  St.  368 182 

Shoemaker  v.  Mechanics'  Bank,  59  Pa.  St.  79 '26 

Shocnbergcr's    Executor  v.   Lancaster   Savings    Institution,   28    I'a. 

St.  459  '-'2 

Shover  v.  Western  Union  Telegraph  Co.,  57  N.  Y.  459 134 

Shutts  V.  Fingar,  100  N.  Y.  5.W 97,  138,  1 39 

Sice  V.  Cunningham,  i  Cowen,  397 67 

Siebcneck  7'.  Anchor  Savings  Rank,  11 1  Pn.  St.  187 '30,  140 

Siegel  V.  Dubinsky,  50  Misc.  681 i:i2 


xl  TABLE    OF    CASES. 


PAGE. 

Siogcr  r.  Second  National  Bank.  132  Pa.  St.  307 135 

Simmons  7'.  Thompson,  29  App.  Div.  (N.  Y.)  559 49 

Simpson  f.  Davis,    i  ig   Mass.   269 146 

7'.  Hall,  47   Conn.   417 60 

Simus  T'.  Larkin,  19  Wis.  390 128 

Singer  Manufacturing  Co.  v.  Summers,  143  N.  C.  102 39,  66,  77 

99,  176,  177 

Skilbeck  v.  Garbett,  7  Q.  R.  846 126 

Slack  7'.  Kirk.  67  Pa.  St.  380 93 

Slagel  V.  Rusts'   Admr..  4  Graft.  274 93 

Sloan  f.  The  Union  Banking  Co.,  67  Pa.  St.  470 70 

Slocomb  7'.  Lizzardi,  21  La.  Ann.  355 122 

Smalley  7'.  Wright,  40  N.  J.  Law,  471 122 

Smith  7'.  Bayer.  46  Ore.    143 53,  63 

7'.  Caro,  9  Oregon,  278 19,  58,  91 

v.  Clarke,   Peake,   225 55 

V.  Dunham,  8  Pick.  246 148 

V.  Ellis,  29  Me.  422 14 

V.  Erwin,  77  N.  Y.  466 140 

V.  Fisher,  24  Pa.  St.  222 107 

V.  Hill,  6  Wis.    154 121 

v.  Kendall,  6  T.  R.   123 ■. 20 

V.  Lounsdale,  6  Oregon,  78 108,  120,  130 

V.  Marsack,  6  C.  B.  4S6 83 

V.  Melton,  133  Mass.  369 t6i 

V.  Pickham,  8  Tex.  Civ.  App.  326 131 

V.  Poillon,  87  N.  Y.  590 125 

V.  Rockwell,  2  Hill,  482 103 

V.  Shippcy,   182  Pa.  St.  24 50 

V.  Smith,  I  R.  L  388 28 

V.  State  Bank,  104  N.  Y.  Supp.  750 45,  146 

Sneel  v.  Prescott,  i  Atk.  245 52 

Solomon  7'.  Hopkins,  61   Conn.  47 31 

Southern  Loan  Co.  v.  Morris,  2  Pa.  St.  175 91 

Spann  v.  Baltzell,  i  Fla.  301 118,  165 

Spear  v.  Pratt,  2  Hill,  582 152 

Spencer  v.  Carstarphen,   15   Colo.  445 49 

V.  Drake,  84  App.  Div.  272 98 

V.  Sloan,  108  Ind.  183 40 

Spies  V.  National  City  Bank,  174  N.  Y.  222 138 

Spoffard  v.  Norton,  126  Mass.  333 53 

Sprague  v.  Fletcher,  8  Oregon,  367 131 

Spurgeon  v.  Smiths,  1 14  Ind.  453 I39 

Stanton  v.  Blossom,  14  Mass.  116 116 


TABLE    OF    CASES.  xH 


PAGE. 

Stapleton  v.  Louisville  Banking  Co.,  95  Ga.  802 9 

Stark  V.  Olsen,  44  Xeb.  646 10 

Staylor  z:  Ball,  24  Md.   183 132 

Steadman  v.  Jilman,   10  Conn.  56 76 

Steckel  z:  Steckel,  28  Pa.  St.  233 66 

Stein  z'.  Yglcsias,  i  Crom.  Mees.  &  Ros.  565 76 

Stephens  v.  ]Monongahela  National  Bank,  88  Pa.  St.  157 40,  45 

Stephenson  v.  Dickson,  24  Pa.  St.  148 124,  135 

Sterry  v.  Robinson,  i  Day,  11   (Conn.) 162 

Stevens  v.  Brice,  21  Pick.  193 66 

Stewart  v.  Eden,  2  Cai.   121 139 

V.  Kennett,  2  Camp.   177 116 

z'.  Preston,  i  Fla.  10 54 

St.  L.  &  S.  F.  Ry.  Co.  v.  Johnston,  133  U.  S.  566 180 

Stoddard  v.  Kimball,  6  Cushing,  469 43 

Stoneman  v.  Pyle,  35  Ind.  103 9 

Struthers  z'.  Blake.  30  Pa.  St.  139 102,  126 

Stuber  v.  Schack,  83  111.  192 140 

Sturges  V.  Chicago  Fourth  National  Bank,  75  111.  595 153 

Si'-llivan  v.  German  National  Bank,  18  Colo.  App.  99 74 

V.  Langley,   120  Mass.  437 78 

Sulsbacker  v.  Bank  of  Charlestown,  86  Tenn.  201 102,  162 

Summers  v.  Barrett,  65  Iowa,  292 no 

Sumner  z'.  Bowen,  2  Wis.  524 165 

z'.  Kimball,  2  Wis.  524 135 

Sumwalt  z'.  Rigeley.  20  Md.  107 33 

Superior  City  v.  Ripley,  138  U.  S.  93 152 

Sussex  Bank  t-.  Baldwin.  2  Harr. .  487  (N.  J.) 100,  119 

Suydam  z'.  Combs,  3  Green  (N.  J.)   133 83 

Sutherland  v.  Mead,  80  App.  Div.  103 42 

Sweeney  v.  Thickstum,  77  Pa.  St.  131 16 

Sweeny  v.  Easter,  i  Wall.  173 52 

Swengle  v.  Wells,  7  Ore.  222 113 

Swift  V.  Smith,   102  U.  S.  442 69 

v.  Tyson,  16  Pet.  i 40 

Swopc  v.  Ross.  40  Pa.  St.  1S6 81 

Sylvester  v.  Crohan.  138  N.  Y.  494 96 

Bleckley  Co.  v.  Alewinc,  48  S.  C.  308 10 

Tnlcott  v.  Cogswell.  3  Day.  512 92 

Tanner  f.  Hall,  i  Pa.  St.  417 46 

Tate  V.  Sullivart  .30  Md.  464 13J,  135 

Taunton  Bank  7'.  Richardson.  5  Pick.  436 log 

Taylor  7'.   Croker,  4  Rsp.   187 82 

Terbell  v.  Jones,  15  Wis.  253 129,  165 


xlii  TABLE    OF    CASES. 


PACE. 


Terry  r.  Bisscll.  26  Conn.  41 37 

riiird  National  Bank  r.  Bowman,  50  App.  Div.  66 12 

Tlionipson  v.  Commercial  Bank,  3  Caldio,  49 150 

V.  Ketcham,  8  Johns.   146 '9 

Thornton  v.  Applcton.   29   Mo.   298 M^ 

V.  Wynn,  12  Wheat.  183 i30 

Thorp  7:  Mindeman,  123  Wis.  149 I4>  5°,     54 

Thorpe  z:  White,   188  Mass.  333 3,  146 

Throop  Grain  Cleaner  Co.  v.  Smith,  no  N.  Y.  83 150,  180 

Thurston  v.  McKenn,  6  Mass.  4^^ 66 

Tibby  Bros.   Glass  Co.  v.  Farmers'  and  Mechanics'   Bank,    (Pa.) 

69  Atl.  Rep.  280 J8o 

Tidmarsh  v.  Grover,  i  Maulc  &  S.  735 m8 

Tindal  r.  Brown,  i  Term  Rep.  167 n6 

Tischlo  V.  Shurman,  49  Misc.  257 ^9 

Tobcy  V.  Lenning.  14  Pa.  St.  483 t  18 

Tod  V.  Wick,  36  Ohio  St.  370 ^^- 

Todd  V.  Ncal's  Administrator,  49  Ala.  273 166 

V.  Shelburne,  8  Hun,  512 75 

Tolman  v.  American  National  Bank,  22  R.  I.  462 36 

Tombeckbe  Bank  v.  Stratton,  7  Wend.  429 ^39 

Tomlinson  Carriage  Co.  r.  Kinsella,  31  Conn.  273 5 

Toole  V.  Craft,  193  Mass.  no 3,  109,  130 

Torbet  v.  Montague,  38  Colo.  325 5i.  9i.  108 

Torpey  v.  Tebo,  184  Mass.  307 8,  13,  176 

Torrey  v.  Frost,  40  Me.  74 '34 

Town  v.  Rice,  122  Mass.  67 I5 

of  Solon  z:  Williamsburgh  Savings  Bank,  n4  N.  Y.  122.146,  147 

Townsley  v.  Sumrall,  2  Pet.  170 165 

Trader  v.  Chicester,  41  Ark.  242 9 

Traders'  National  Bank  v.  Jones,  104  App.  Div.  433 "^^ 

V.  Rogers,   167  Mass.  315 ^7 

Trickey  v.  Larne,  6  M.  &  W.  278 44 

Troy  City  Bank  v.  Lanman,  19  N.  Y.  477 '56 

Trustees  of  the  I.  I.  Fund  v.  Lewis,  34  Fla-  4^4 i'2,  176 

Tullis  7'.  McClary,  128  Towa,  493 62 

Turnbull  v.  Maddux.  68  Md.  579 '29 

Turner  v.  Iron  Chief  Mining  Co.,  74  Wis.  355 96 

Tuscumbia,  etc.,  R.  R.  Co.  v.  Rhodes,  8  Ala.  206 76 

Twelfth  Ward  Bank  v.  Brooks,  63  App.  Div.  220 I43 

Tyler  v.  Young,  30  Pa.  St.  143 98 

Tyson  v.  Joyner,  139  N.  C.  69 62 

Ulster  County  Bank  v.  McFarlan,  5  Tlill,  432 I54 

Union  Bank  v.  Fowlkes,  2  Sneed,  556 150 

V.  Willis,  8  Mete.  504 105 


TABLE    OF    CASES.  xliii 

PAGE. 

Union  Stockyards  Nat.  Bank  v.  Bolan,  (Idaho)  93  Pac.  Rep.  509-  I5 
United  States  z:  American  Exchange  National  Bank,  70  Fed.  Rep. 

232 90 

V.  Hodge,  6  How.  279  (U.  S.) 140 

V.  White,  2  Hill,  59 20 

National  Bank  v.  Ewing,  131  N.  Y.  506 47 

University  Press  v.  Williams,  48  App.  Div.  (N.  Y.)   190 132 

Valley  National  Bank  v.  Uhlcr.  191  Pa.  St.  356 130 

Savings  Bank  v.  Mercer,  97  Md.  458 69 

Vanarsdale  v.  Hax,  107  Fed.  Rep.  878 60 

Van  Buskirk  z:  State  Bank  of  Rocky  Ford,  35  Colo.  142. .  .153.  I79,  180 
Vanderford  z'.   Farmers'   and   Mechanics'    National  Bank,  66  Atl. 

Rep.  47   ^^^ 

Vander  Ploeg  v.  Van  Zuuk,  (Iowa)   112  N.  W.  Rep.  807 3,  24,  64 

Van  Duzer  v.  Howe,  21  N.  Y.  531 ^^ 

Van  Hoosen  v.  Van  Alstyne,  9  Wend.  75 ^9.  59 

Vathir  v.  Zane,  6  Gratt.  246 78 

Vinton  v.  King,  4  Allen,  562 64 

Vosburgh  v.  Diefendorf,  119  N.  Y.  357 ^ 

Wadhams  z:  Portland,  etc.,  Ry.  Co.,  37  Wash.  86 i53 

Wagman  v.  Hoag,  14  Barb.  233 140 

Wagner  v.  Kenner,  2  Rob.  120 22 

Wahlig  V.  The  Standard  Pump  Manufacturing  Co.,  25  N.  Y.  St. 

Rep.  864   -^6 

Walker  v.  Bank  of  State  of  New  York,  13  Barb.  636 156 

V.  N.  Y.  State  Bank,  9  N.  Y.  582 158 

Wall  v.  Hallenbcck.  19  Neb.  639 50 

Wallabout  Bank  v.  Peyton,  123  App.  Div.  (N.  Y.)  727 66 

Wallace  v.  Agry,  4  Mason,  333 ^^o 

V.  Crilly,  46  Wis.  577 ^°' 

v.  McConncll,    13  Peters,   136 96,  156 

Walsh  V.  Blatchley,  6  Wis.  422 160,   173.  i74 

V.  Dart,  12  Wis.  635 18 

V.  Dort,  23  Wis.  334 '6o 

Ward  V.  Allen,  2  Mete.  53 ^53 

V.  Tyler,  52  Pa.  St.  393 ^-"^ 

Waring  v.  Bctts,  90  Va.  46 101.  103 

Watervlict  Rank  z:  White,  i  Dcnio,  608 .56 

Watson  V.  Russell.  3  R.  &  S.  .^4 :  5  B.  &  S.  968 64 

z:  Wyman.  161   Mass.  96,  99 "2 

Way  V.  Butterworth.  108  Mass.  509 '"4 

Weaver  v.  Bardcn.  49  N.  Y.  286 .19 

Weber  v.  Orton,  91   Mo.  680 62.   100 

Wedge  Mines  Co.  v.  Denver  National  Bank,  19  Colo.  App.  182 176 


xliv  TABLE    OF    CASES. 

PAGE. 

Weeks  f.  Esler.  143  N.  Y.  374 I7 

Weenis  v.  Fanners'  Bank,   13  Md.  231 105,  13S.  165 

Welsh  f.  B.  C.  Taylor  .Manufacturing  Co.,  82  111.  581 106 

r.  Sage,  47  N.  Y.  143 69 

West  Branch  Bank  :•.  Inilner,  3  Pa.  St.  399 134 

Wcstberg  v.  Chicago  L.  &  C.  Co.,  117  Wis.  589 9.  155 

Western  Wheeled  Scraper  Co.  v.  Sadilek,  50  Neb.  105 178 

Westfall  r.  Farwell,   13  Wis.  504.  509 120,  121 

Westminster  Bank  v.  Whcaton,  4  R.  I.  30 I77 

West  River  Bank  v.  Taylor,  34  N.  Y.  128 1 17,  I39 

Weyerhauser  v.  Dunn,  100  N.  Y.  150 24,  148 

Weyman  v.  Yeomans,  84  111.  403 148 

Wheeler  ?'.  Field,  6  Mctc.  290 107 

V.  Guild,  20  Pick.  545,  553 112 

V.  Warner,  47  N.  Y.  519  97 

V.  Webster,  i  E.  D.  Smith,  i 152 

White  V.  Camp,  i  Fla.  94 58 

v.  Savage,  48  Oregon,  604 45 

Whitcford  v.  Burckmeyer,   i   Gill,   127 129 

V.  Munroe,  17  Md.    135 35 

Whitehead  v.  Walker,  10  Mees.  &  Welsh.  696 76 

\\"hiten  v.  Hayden,  9  Allen,  408 53 

Whitesides  v.  Northern  Bank,  10  Bush.  501 148 

Whitney  v.  Clary,  145  Mass.  156 39 

V.  Collins,  15  R.  I.  44 96 

V.  Elliot  Nat.  Bank,  137  Mass.  351 11 

V.  National  Bank  of  Potsdam,  45  N.  Y.  303 88 

Whittaker  v.  Morrison,  r  Fla.  25 120,  130 

Whittle  V.  Fond  du  Lac  National  Bank,  26  S.  W.  Rep.  1106 9 

Whitwell  V.  Brigham,  19  Pick.  117 83,  123 

V.  Johnston,    17   Mass.   499 124 

Wilkie  V.  Chandon,  i  Wash.  355 131 

Wilkins  z:  Jadis,  2  B.  &  Ad.  188 loi 

Willett  V.  Phcenix  Bank,  2  Duer.  121 22 

Williams  v.  Bank  of  United  States,  2  Peters,  96 128 

V.  Banks,   ir   Md.   198 45 

V.  Drexel,    14  Md.   566 82 

V.  Holt,   170  Mass.  351 62 

V.  Huntington,  68  Md.  590 69,  75,     78 

V.  Moseley,  2  Fla.  304 18 

7>.  Winans,  2  Gr.  239  (N.  J.) I54 

Williamsport  Gas  Co.  v.  Pinkerton,  95  Pa.  St.  62 98 

Willis  V.  Finley,  173  Pa.  St.  28 178 

V.  Green,  5  Hill,  232 105,  123 


TABLE    OF    CASES. 


xlv 


PAGE. 

Wills  V.  Wilson,  3  Oregon,  308 146,  148 

Wilson  V.  Hcndee,   (X.  J.)  66  Atl.  Rep.  413 S5,  86 

V.  Lazier,  11  Gratt.  477 43,  77,  7<- 

V.  Metropolitan  Elevated  Ry.  Co.,  120  N.  Y.  145 /i 

V.  Powers,  130  Mass.  127 ^40 

V.  Senier,   14  Wis.  380 I07 

V.  Tolson,  79  Ga.  137 53 

V.  Wilson,  26  Oregon,  315 38 

Winans  v.  Davis,  3  Harr,  276  (N.  J.) 125 

Windham  Bank  v.  Norton,  22  Conn.  213 106,  125 

Wintermute  v.  Torrent,  83  Mich.  555 53 

Wirt  V.  Stubbleheld,  7  App.  Cas.  D.  C  283 72 

Wisconsin    Yearly    Meeting   of    Freewill    Baptists    v.    Barber,    115 

Wis.  289   ^^ 

Wise  V.  Charlton,  4  A.  &  E.  486 i5 

Wisner  v.  First  National  Bank,   (Pa.)  68  Atl.  Rep.  955 ^55 

Witherow  v.  Slaybach,  158  N.  Y.  649 92 

Wittich  V.  First  Nat.  Bank  of  Pensacola,  20  Fla.  843 i77 

Wolf  V.  Hostetter,  182  Pa.  St.  292 92 

Woman  v.  Frost,  52  N.  Y.  422 44,  45 

Wood  V.  Repold,  3  Harris  &  J.  125 92 

V.  Robinson,  22  N.  Y.  567 39 

V.  Sheldon,  42  N.  J.  Law,  425 89 

V.  Steele,  6  Wall.  80 146,  148 

Woodman  v.  Thurston,  8  Cush.  157 131 

Woods  V.  Neeld,  44  Pa.  St.  86 27 

V.  North,  84  Pa.  St.  407.  • ^^ 

Son  Co.  V.  Schaefer,  173  Mass.  443 49 

Woolenwebcr  v.  Kcttcrlin,  17  Pa.  St.  389 I34 

Wooley  V.  Cobb,  165  Mass.  503 49 

Worthington  v.  Cowles,  12  Mass.  30 93 

Wright  V.  Hart's  Admr.,  44  Pa.  St.  454 '^ 

V.  Irwin,  2:^  Mich.  32 9 

V.  Vermont  Ins.  Co.,  164  Mass.  302 95 

WyckofF  V.  Rnnyon,  33  N.  J.  Law,  107 44 

Ycnncy  v.  Central  City  Bank,  44  Neb.  402 63 

^'ing]ing  v.  Kohlhass,  18  Md.  148 8 

Yoving  V.  Durgin,   15  Gray,  264 128 

V.  Shriner,  80  Pa.  St.  463 76 

Youngs  V.  Lee,  12  N.  Y.  551 "9 

Zimmerman  v.  Anderson,  67  Pa.  St.  421 16 

V.  Rote,  75  Pa.  St.  188 16 


The  Negotiable  Instruments  Law. 


The  Law  Has  Been  Enacted  in  the  Following  States  and 

Territories  : 
Alabama.— Laws  1907,  Chap.  722;  Code  1907,  Chap.  115,  Sees.  4958- 

5149- 

Arizona.— Rev.  Stat.  1901,  p.  852,  title  49  of  Civil  Code,  Sees.  3304- 

3491 ;  Laws  1905,  Chap.  23. 

Colorado. —  Laws  1897,  Chap.  64. 

Connecticut.— Laws  1897,  Chap.  74;  Genl.  Slat.  Rev.  1902,  p.  1028. 

District  of  Columbia.— Laws  U.  S.  1899;  Laws  U.  S.  1901 ;  Laws 
U.  S.  1902,  Sees.  1304-1493. 

Florida.— Laws   1897,  Chap.  4524;  Genl.  Stat.   1906,  p.   1147 ;   Sees. 

2394-3099- 

Idaho. —  Laws  1903,  p.  380. 

Illinois. —  Laws  1907,  p.  403- 

Iowa.— Laws   1902,  Chap.   130;  Laws   1906,   Chap.   I49;   Code  Supp. 
1902,  p.  352,  Chap.  3-A,  Sees.  3o6o-ai-3o6o-ai98. 

Kansas.— Laws  1905,  Chap.  310;  Genl.  Stat.  1905,  P-  967,  Chap.  70, 

Sees.  4533-4732. 

Kentucky. —  Laws  1904,  Chap.  102. 

Louisiana. —  Laws  1904,  Chap.  64. 

Maryland. —  Laws  1898,  Chap.  119. 

Massachusetts.— Laws    1898,   Chap.   533;    Laws    1899.    Chap.    130; 
Rev.  Laws  1902,  p.  628,  Chap.  7Z,  Sees.  18-212. 

Michigan.— Laws  1905.  Chap.  265. 

Missouri.— Laws  1905,  p.  243;  Laws  1907,  p.  366. 

Montana. —  Laws  1903,  Chap.  121. 

Nebraska.— Laws  1905,  Chap.  83;  Comp.  Stat.  1907,  Chap.  41,  Sees. 
3558-ai-3558-ai98. 

Nevada. —  Laws  1907,  Chap.  62. 

New  Jersey. —  Laws  1902,  Chap.  184. 

New  Mexico. —  Laws  1907,  Chap.  83. 

New   York.— Laws   1897,  Chap.  612;   Laws   1898,  Chap.  336;  Laws 
1904.  Chap.  287. 

North    Carolina.— Laws    1899,   Chap.  7ii\  Laws   1905,  Chap.  327; 
Laws  1907.  Chap.  807;  Revisal,  1905.  P-  655.  Chap.  54,  Sees.  2151-2346. 

North   Dakota  — Laws   1899,  Chap.   113;  Civil  Code,   1905.  P-   1002, 
Chap.  90,  Sees.  6303-6498. 

Ohio.— Laws  1902,  p.  162;  Bates'  Annot.  Stat.   (5th  cd.)  pp.  1800a- 
1807.  Sees.  3171-3178C. 

Oregon.— Laws  1899.  p.   18;  Bellinger  &  Cotton's  Annot.     Codes  & 

Stat.,  p.  1440,  Sees.  4403-4594- 
Pennsylvania. —  Laws  1901,  No.  162. 

rxhiil 


xlviii  i:nactments  in  states  and  teuuitories. 

Rhode  Island.— Laws  1899,  Chap.  674. 

Ten NF.ssKE.— Laws  1S99,  Cliap.  94- 

Utah.—  Laws  1S99,  Chap.  83. 

ViRGiNi.\.— Laws  1898,  Chap.  866;  Laws  1906,  Chap.  219;  Code,  1904, 
Chap.  133a.  Sec.  2841a. 

\V.\SHiNGTON.— Laws  1899,  Chap.  149. 

West  Virgini.x.— Laws  1907,  Chap.  81. 

Wisconsin.— Laws  1899,  Chap.  356;  Laws  1901,  Chap.  41;  Laws 
1905,  Chap.  262 ;  Laws  1907.  Chap.  361. 

Wyoming.— Laws  1905,  Chap.  43. 


THE  NEGOTIABLE  INSTRUMENTS  LAW, 


Tim  NEGOTIABLE  INSTRUMENTS  LAW. 


A  general  act  relating  to  Negotiable  Instruments  (being  an  act  to 
establish  a  law  uniform  with  the  laws  of  other  States  on  that  sub- 
ject).* 

Article      I.   General  provisions.     (§§  1-7.) 

11.  Form  and  interpretation  of  negotiable  instru- 
ments.    (§§  20-42.) 

III.  Consideration.     (§§  50-55-) 

IV.  Negotiation.     (§§  60-80.) 

V.  Rights  of  holder.     (§§  90-98.) 
VI.  Liabilities  of  parties.     (§§  110-119.) 
VII.  Presentment  for  payment.     (§§  130-148.) 
VIII.  Notice  of  dishonor.     (§§  160-189.) 
IX.  Discharge        of        negotiable        instruments. 
(§§  200-206.) 
X.  Bills    of   exchange;   form   and   interpretation. 

(§§  210-215.) 
XI.  Acceptance.     (§§  220-230.) 
XII.   Presentment  for  acceptance.      (§§  240-248.) 

XIII.  Protest.     (§§  260-268.) 

XIV.  Acceptance  for  honor.     (§§  280-290.) 
XV.   Payment  for  honor.     (§§  300-306.) 

XVI.  Bills  in  a  set.     (§§  310-315.) 
XVII.   Promissory  notes  and  checks.     (§§  320-325.) 
XVIII.  Notes   given   for   a   patent   rights  and   for  a 
speculative  consideration.     (§§  330-332-) 
XIX.  Laws  repealed,  when  to  take  effect.     (§§  340, 

34I-)        

*  This  is  the  General  Title  proposed  by  the  Commissioners  on  Uni- 
formity of  Laws,  and  used  in  many  of  the  States.  It  has  been  held 
sufficiently  comprehensive  under  a  constitutional  provision  providing 
that  no  law  shall  embrace  more  than  one  subject  to  be  expressed  in 
the  till.-.     CiUey  v.  Harrcll  (Tcnn).  lor  S.  W,  Rep.  424- 


2  THE    NEGOTIABLE   INSTRUMENTS   LAW. 

ARTICLE  I. 
General  Provisions. 

Section   i.  Short  title. 

2.  Definitions  and  meaning  of  terms. 

3.  Person  primarily  liable  on  instrument. 

4.  Reasonable  time,  what  constitutes. 

5.  Time,   how  computed;  when  last  day  falls  on 

holiday. 

6.  Application  of  chapter. 

7.  Rule  of  law  merchant;  when  governs. 

Section  i.  Short  title. —  This  act  shall  be  known  as  the 
negotiable  instruments  law  (a). 

(a)  The  law  is  confined  to  negotiable  instruments.  No  attempt  is 
made  to  deal  with  instruments  which  are  non-ne^otiablo;  and  they 
are  not  governed  by  the  statute.  In  determining  whether  the 
rules  of  the  statute  will  apply  to  any  particular  instrument,  it  is 
first  necessary  to  ascertain  whether  such  instrument  is  negotiable, 
according  to  the  terms  of  the  statute.  In  many  instances  the 
rules  will  be  the  same  for  instruments  of  either  kind;  but  that 
is  not  because  instruments  which  are  non-negotiable  are  governed 
by  the  statute,  but  because  the  statute  is  a  codification  of  common 
law  rules  which  before  its  adoption  applied  equally  to  both  classes 
of  instruments.  In  other  words,  a  negotiable  instrument  is  gov- 
erned by  the  statute  and  a  non-negotiable  instrument  by  the 
rules  of  the  common  law,  though  frequently  these  rules  will  be 
the  same.  For  example,  if  a  note  drawn  payable  at  a  bank  con- 
tains terms  which  render  it  non-negotiable,  the  provision  of  sec- 
tion 87,  that  "where  the  instrument  is  made  payable  at  a  bank  it 
is  equivalent  to  an  order  to  the  bank  to  pay  the  same  for  the 
account  of  the  principal  debtor  thereon,"  would  not  apply;  but 
the  case  would  be  governed  by  the  rule  of  the  common  law,  which 
is  the  same  as  the  statutory  rule  in  some  of  the  States,  but  dif- 


GENERAL    PROVISIONS.  3 

ferent   in   others.     This  distinction   must  be   carefully  borne  in 
mind,  or  much  confusion  will  result. 

In  a  case  arising  under  the  laws  of  another  State  the  court 
will   not   take   judicial    notice   that   the   Negotiable    Instruments 
Law    has    been   enacted   in   that    State;    but,    in   the    absence   of 
evidence    on    the    subject,    will    presume    that    the    law    of    such 
State   is   the   same   as   the   common    law   before   the   enactment. 
Demelman   v.   Brazier,   193   Mass.   589.     In   construing   the   Act. 
however,    the    courts    will    notice    the    fact    that    its    adoption 
was  the  result  of  an  effort  to  bring  about  a  uniform  system  of 
law   respecting  negotiable   instruments.     Eockfield   v.   First  Nat. 
Bank    of    Springfield    (Ohio)    83    N.    E.    Rep.    392;    Downey    v. 
O'Keefe,  26  R.  I.  571 ;  Thorpe  v.  White,  188  Mass.  333 ;  Toole  v. 
Crafts,  193  Mass.  110;  Gibbs  v.  Guaraglia  (N.  J.)  67  Atl.  Rep. 
81;  Baumeister  v.  Kuntz   (Fla.)  42  South.  Rep.  886;  Farquahar 
Co.  V.  Higham    (N.  D.)   112  N.  W.  Rep.  557;  Vander  Ploeg  v.- 
Van  Zuuk   (Iowa)    112  N.  W.  Rep.  807.     In  Baltimore  &  Ohio 
R.  R.  Co.  V.  First  National  Bank  of  Alexandria  (102  Va.  757,  758), 
it  was  said :    "  This  opinion  might  be  greatly  prolonged  by  the 
citation  of  conflicting  cases,   and  a  discussion  of  the  discordant 
views  entertained  by  courts  and  text-writers  of  the  greatest  ability 
upon    these   questions;   but  the   object,   as   we  understand    it,   of 
the   codification    of   the   law   with    respect   to    negotiable   instru- 
ments was  to  relieve  the  courts  of  this  duty,  and  to  render  certain 
and  unambiguous  that  which  had  theretofore  been  doubtful  and 
obscure,   so   that   the  business   of   the   commercial   world,  largely 
transacted  through  the  agency  of  negotiable  paper,  might  be  con- 
ducted in  obedience  to  a  written  law  emanating  from  a  source 
whose  authority  admits  of  no  question." 

§2.  Definitions    and    meaning   of   terms.— In     this     act, 
unless  the  context  otherwise  requires : 
^      "Acceptance  "  means  an  acceptance  completed  by  delivery 
or  notification. 

"Action  "  includes  counter-claim  and  set-off. 

"  Rank  "  inchides  any  person  or  association  of  persons 
carrying  on  the  business  of  banking,  whether  incorporated 
or  not. 


4  THE    NEGOTIABLE   INSTRUMENTS   LAW. 

*'  Bearer  "  means  the  person  in  possession  of  a  bill  or  note 
Avliich  is  payable  to  bearer. 

''  Bill  "  means  bill  of  exchange,  and  "  note  "  means  ne- 
gotiable promissory  note. 

"  Delivery  "  means  transfer  of  possession,  actual  or  con- 
structive, from  one  person  to  another. 

"  Holder  "  means  the  payee  or  indorsee  of  a  bill  or  note, 
who  is  in  possession  of  it,  or  the  bearer  thereof. 

"  Indorsement "  means  an  indorsement  completed  by 
delivery. 

"  Instrument  "  means  negotiable  instrument. 

"  Issue  "  means  the  first  delivery  of  the  instrument,  com- 
plete in  form,  to  a  person  who  takes  it  as  a  holder. 

"  Person  "  includes  a  body  of  persons,  whether  incorpo- 
rated or  not. 

"  Value  "   means  valuable  consideration. 

"  Written "  includes  printed,  and  "  writing "  includes 
print. 

§  3.  Person  primarily  liable  on  instrument. —  The  per- 
son "  primarily  "  liable  on  an  instrument  is  the  person  who 
by  the  terms  of  the  instrument  is  absolutely  required  to 
pay  the  same.  All  other  parties  are  "  secondarily " 
liable  (a). 

(a)  This  section  is  to  be  construed  in  connection  with  section 
37,  which  provides  that  "  no  person  is  liable  on  the  instrument 
whose  signature  does  not  appear  thereon ; "  and  also  with  section 
211,  which  provides  that  "  the  drawee  is  not  liable  on  the  bill 
unless  and  until  he  accepts  the  same ; "  and  with  section  325, 
which  provides  that  "the  bank  is  not  liable  to  the  holder  unless 
and  until  it  accepts  or  certifies  the  check."  These  are  not,  by  the 
terms  of  the  instrument,  absolutely  required  to  pay  the  same 
until  such  acceptance  or  certification.  In  Rouse  v.  Wooten  (140 
N.  C.  557,  558)  it  was  said :  "A  surety  comes  squarely  within  the 
definition  of  a  person  whose  liability  is  primary,  for  he  is  by 
the  terms  of  the  instrument  absolutely  required  to  pay  the  same." 
But  obviously  this  would  not  be  so  in  the  case  of  one  signing  as 


GENERAL    PROVISIONS.  5 

"  guarantor,"  since  he  is  liable  only  where  there  is  default  by  the 
party  whose  obligation  he  has  guaranteed. 

§  4.  Reasonable  time,  what  constitutes. —  In  determin- 
ing what  is  a  "  reasonable  time "  or  an  "  unreasonable 
time,"  reo-ard  is  to  be  had  to  the  nature  of  the  instrument, 
the  usage  of  trade  or  business  (if  any)  with  respect  to  such 
instruments,  and  the  facts  of  the  particular  case  (a). 

(a)  Where  the  facts  are  doubtful  or  disputed,  the  question  of 
reasonable  time  is  a  mixed  question  of  law  and  fact.  But  when 
the  facts  are  clear  and  undisputed,  the  question  is  one  of  law  for 
the  court.  Commercial  Nat.  Bank  v.  Zimmerman,  185  N.  Y. 
310;  German  Am.  Bank  v.  Mills,  99  App.  Div.  (N.  Y.)  312;  Pres- 
cott  Bank  v.  Coverly,  7  Gray,  217;  Gilmore  v.  Wilbur,  12  Pick. 
124;  Holbrook  r.  Burt,  22  Pick.  555;  Northwestern  Coal  Co.  v. 
Bowman,  69  Iowa,  153;  Aymar  v.  Beers,  7  Cow.  705;  Tomlinson 
Carriage  Co.  v.  Kinsella,  31  Conn.  273.    See  note  to  section  131. 

§  5.  Time,  how  computed ;  when  last  day  falls  on  holiday. 
—  Where  the  day,  or  the  last  day,  for  doing  any  act  herein 
required  or  permitted  to  be  done  falls  on  Sunday  or  on  a 
hoHday,  the  act  may  be  done  on  the  next  succeeding  secular 
or  business  day  (a). 

(a)  As  to  the  mode  of  computing  time,  see  the  New  York  Stat- 
utory Construction  Law  (§§  26,  27). 

§  6.  Application  of  chapter. —  The  provisions  of  this 
act  do  not  apply  to  negotiable  instruments  made  and  de- 
livered prior  to  the  passage  hereof  (a). 

(a)  The  time  when  the  statute  was  to  take  effect  is  provided  for 
by  section  341.  In  New  York  this  was  October  1st,  1897.  But 
while  the  law  did  not  go  into  effect  until  then,  its  application  is 
not  limited  to  instruments  made  after  tlial  date.  An  instrument 
made  and  delivered  after  the  passage  of  the  act  was  equally 
within  its  operation  after  October  1st.  For  example,  if  a  note 
payable  four  months  after  date  was  dated  and  delivered  on  July 
15th,  1897,  it  must,  at  maturity,  Iiave  been  presented  for  payment 
in  the  manner  prescribed  by  the  statute;  and  if  dishonored,  the 


6  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

statutory  rules  as  to  giviut--  notice  oL'  dishonor  must  have  been 
complied  with.  But  iu  tho  case  of  a  note  dated  and  delivered 
April  15th,  1897,  and  payable  six  months  after  date,  none  of  the 
provisions  of  the  statute  apply. 

§7.  Law  merchant;  when  governs. —  In  any  case  not 
provided  fur  in  this  act  the  rules  of  the  law  merchant  shall 
govern  (a). 

(a)  It  is  to  be  observed  that  the  rules  governing  in  such  cases 
are  not  those  which  existed  by  virtue  of  a  statute.    All  prior  stat- 
utes upon  the  subject  of  bills  and  notes  are  repealed;  and  where  a 
ease  arises  which  is  not  provided  for  in  the  Negotiable  Instru- 
ments Law,  it  is  not  to  be  determined  by  resort  to  any  of  the 
former  statutes,  but  by   reference  to  the  rules  of  the  law  mer- 
chant.    As   to   the   presumption   concerning   the  law   of   another 
State,  see  Demelman  v.  Brazier,  193  Mass.  588.     In  the  late  case 
of  Columbian  Banking  Co.  v.  Bowen  (114  N.  W.  Ivep.  451)  it  was 
said  by  the  Supreme  Court  of  Wisconsin :  "  Counsel  for  appellant 
have  presented  quite  an   extended  argument,  referring  to   many 
authorities,   as  to   the  law  antedating   and  independently  of  the 
negotiable   instrument  statute    (chapter   356,  p.  681,   Laws   1899) 
to  support  the  proposition,  that  appellant  was  released  from  lia- 
bility on  the  instrument  in  question,  because  of  the  period  inter- 
vening between  his  parting  therewith  and  the  presentation  thereof 
to  the  drawee  for  payment.     Such  statute  was  enacted  for  the 
purpose  of  furnishing,   in   itself,   a  certain  guide   for  the  deter- 
mination of  all  questions  covered  thereby  relating  to  commercial 
paper,  and,  therefore,  so  far  as  it  speaks  without  ambiguity  as  to 
any  such  question,   reference  to  case  law  as   it  existed  prior  to 
the  enactment  is  unnecessary  and  is  liable  to  be  misleading.     The 
negotiable  instrument  law  is  not  merely  a  legislative  codification 
of   judicial   rules   previously  existing   in   this  state  making  that 
written  law,  which  was  before  unwritten.     It  is,  so  far  as  it  goes, 
an  incorporation  into  written  law  of  the  common-law  of  the  state, 
so  to  speak,  the  law-merchant  generally  as  recognized  here,  with 
such  changes  or  modifications  and  additions  as  to  make  a  system 
harmonizing,  so  far  as  practicable,  with  that  prevailing  in  other 
states.     That  it  contains  some  quite  material  changes  in  previous 
rules  governing  commercial  paper  we  have  had  occasion  hereto- 
fore to  point  out.     Hodge  v.   Smith,  130  Wis.  326;  Aukland  v. 
Arnold  (Wis.)  Ill  N.  W.  Rep.  212." 


FORM    AND    INTERPRETATION. 


ARTICLE  II. 
Form  and  Interpretation. 

Section  20.  Form  of  negotiable  instrument. 

21.  Certainty  as  to  sum;  what  constitutes. 

22.  Wlien  promise  is  unconditional. 

23.  Determinable  future  time ;  what  constitutes. 

24.  Additional    provisions    not    affecting   negotia- 

bility. 

25.  Omissions;  seal;  particular  money. 

26.  When  payable  on  demand. 
T.y.  When  payable  to  order. 

28.  When  payable  to  bearer. 

29.  Terms  when  sufficient. 

30.  Date,  presumption  as  to. 

31.  Ante-dated  and  post-dated. 

32.  When  date  may  be  inserted. 

33.  Blanks,  when  may  be  filled. 

34.  Incomplete  instrument  not  delivered, 

35.  Delivery;  when  effectual;  when  presumed. 

36.  Construction  where  instrument  is  ambiguous. 

37.  Liability  of  person  signing  in  trade  or  assumed 

name. 

38.  Signature  by  agent;  authority;  how  shown. 

39.  Liability  of  person  signing  as  agent,  et  cetera. 

40.  Signature  by  procuration ;  effect  of. 

41.  Effect  of  indorsement  by  infant  or  corporation. 

42.  Forged  signature ;  effect  of. 

§  20.  Form  of  negotiable  instrument. — An  instrument  to 
be  negotiable  must  confonn  to  the  following  requirements: 

T.  It  must  be  in  writing  (a)  and  signed  by  the  maker  or 
drawer. 


8  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

2.  Must  contain  an  unconditional  promise  (6)  or  order 
to  pay  a  sum  certain  in  money  (c)  ; 

3.  Must  be  payable  on  demand  {d),  or  at  a  fixed  or 
determinable  future  time  (e)  ; 

4.  Must  be  payable  to  order  (/)  or  to  bearer  (g)  ;  and 

5.  Where  the  instrument  is  addressed  to  a  drawee,  he 
must  be  named  or  otherwise  indicated  therein  with  reason- 
able certainty  (/i). 

(a)  The  writing  may  be  in  pencil.  Brown  v.  Butchers'  Bank, 
6  Hill,  443. 

(fc)   See  section  22. 

(c)  This  is  the  nile  of  the  law  merchant,  and  the  rule  which 
prevails  in  most  of  the  States.  In  some  States  —  as,  for  example, 
in  Georgia  —  certain  instruments  are  declared  by  statute  to  be 
negotiable,  though  they  provide  that  payment  is  to  be  made 
in  goods  or  merchandise.  See  also  section  25,  subdivision  5. 
In  New  York  warehoiise  receipts  issued  by  certain  corporations 
are  declared  to  be  negotiable.  See  Hanover  Nat.  Bank  v.  Ameri- 
can Dock  and  Trust  Co.,  148  N.  Y.  612;  Corn  Exchange  Bank  v. 
Same,  149  N.  Y.  174.  The  act  does  not  repeal  these  statutes. 
An  insrtrument  which,  by  its  true  construction,  is  an  unconditional 
order  to  pay  a  certain  sum  of  money  at  a  fixed  future  time,  to 
the  payee  or  order,  is  a  bill  of  exchange  under  the  terms  of  the 
statute.     Torpey  v.  Tebo,  184  Mass.  307. 

(d)  See  section  26. 

(e)  See  section  23. 

(f)  See  section  27.  The  North  Carolina  Act  reads:  "Must  be 
payable  to  the  order  of  a  specified  person  or  bearer."  The  words 
"  specified  person  "  are  surplusage,  since  by  section  27  this  is  de- 
clared to  be  the  effect  of  the  term  "  order." 

(g)  Yingling  r.  Kohlhass,  18  Md.  148;  Curtis  v.  Hazen,  56  Conn. 
146.  If  the  instrument  is  payable  to  a  particular  person,  and  not 
to  his  order  or  to  bearer,  it  is  not  negotiable.  Backus  v.  Danf orth, 
10  Conn.  297.  As  to  bonds  payable  to  bearer  and  coupons,  see 
Carr.  v.  Leferre,  27  Pa.  St.  413;  County  of  Beaver  v.  Armstrong, 
44  Pa.  St.  63;  National  Exchange  Bank  v.  Hartford,  etc.,  R.  R. 
Co.,  8  R.  I.  375.  As  to  Treasury  notes,  see  Frazer  v.  D'Quilliers, 
2  Pa.  St.  200.  See  section  28.  An  instrument  which  is  not  pay- 
able to  order  or  bearer  is  not  within  the  terms  of  the  statute. 


FORM    AND    INTERPRETATION.  9 

Westberg  r.  Chicago  L.  &  C.  Co.,  117  Wis.  589.  In  Tennessee 
the  Act  has  repealed  Shannon's  Code,  §  3506,  providing  that  every 
not-e,  whether  payable  to  order  or  not,  should  be  negotiable  in 
the  same  manner  as  promissory-  notes.  Gilley  v.  Harrell  (Tenn.), 
101  S.  W.  K«p.  424. 
(h)  See  section  215. 

§21.  Certainty  as  to  sum;  what  constitutes. —  The  sum 
payable  is  a  sum  certain  within  the  meaning  of  this  act, 
although  it  is  to  be  paid : 

1.  With  interest;  or 

2.  By  stated  instalments   (a)  ;  or 

3.  By  stated  instalments,  with  a  provision  that  upon  de- 
fault in  payment  of  any  instalment  or  of  interest  (b),  the 
whole  shall  become  due ;  or 

4.  With  exchange,  whether  at  a  fixed  rate  or  at  the 
current  rate  (c)  ;  or 

5.  With  costs  of  collection  or  an  attorney's  fee,  in  case 
payment  shall  not  be  made  at  maturity  (d). 

(o)  Markey  t'.  Corey,  108  Mich.  184 ;  Wright  v.  Irwin,  33  Mich. 
32.  In  this  case  the  note  was  for  $1500,  to  be  paid  twenty  per 
cent,  a  month  from  the  1st  of  July,  1871. 

(6)  For  a  case  arising  under  the  provisions  of  the  Wisconsin 
Act,  see  Hodge  v.  Wallace,  129  Wis.  84. 

(c)  Second  National  Bank  of  Aurora  v.  Basuier,  65  Fed.  Hop. 
58;  Hastings  v.  Thompson,  54  Minn.  184;  Flagg.r.  School  Dis- 
trict, 4  N.  D.  30;  Whittle  v.  Fond  du  Lac  National  Bank  (Tex.) 
26  S.  W.  Rep.  1106.     Contra,  Culbertson  v.  Nelson,  93  Iowa  187. 

(d)  As  to  this  point  there  has  been  much  conflict  in  tlie  dec 
sions.  The  rule  adopted  in  the  Act  is  the  one  sustained  by  the 
weight  of  authority.  It  is  sui)ported  by  National  Bank  v.  Sutton 
Mfg.  Co.,  6  U.  S.  App.  312,  331;  Oppenhoiin(>r  v.  Fanners  n-,>d 
Merchants'  Bank,  07  Tenn.  19;  Montgomery  r.  Crossthwait.  90 
Ala.  553;  Trader  v.  ('lii.li.  st<r.  11  Ark.  2\2:  Stapleton  v.  Louis- 
ville Banking  Co.,  95  Ga.  802;,Dorsey  v.  WolfF,  142  111.  589; 
Stonemnn  v.  Pyle,  35  Ind.  103;  Shenandnali  Nat.  Bank  r.  Marsh, 
89  Iowa  273;  Bonn  v.  Knt/.schan,  24  Oregon  28;  Seaton  v. 
Scovillc,    18   Kans.   433;    Dietrirli    v.    Boylie,   23    La.    Ann.   767; 


lO  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

Second  National  Bank  v.  Angliii,  (,!  Wash,  403;  Heard  c.  Dubuque 
liank,  8  Neb.  10 ;  Stark  v.  Olsen,  44  Neb.  646.  The  courts  which 
have  sustained  this  rule  have  taken  the  view  that  so  long  as  the 
amount  payable  is  certain  up  to  the  time  of  maturity  and  dis- 
honor, it  is  not  essential  that  after  that  time,  when  the  instru- 
ment has  become  non-nej;otiable  for  other  reasons,  the  certainty 
as  to  the  amount  should  continue.  In  the  Tennessee  case  above 
cited  the  court  said:  "Upon  a  careful  review  of  the  authorities, 
we  can  perceive  no  reason  why  a  note  otherwise  imbued  with  all 
the  attributes  of  negotiability  is  rendered  non-negotiable  by  a 
stipulation  which  is  entirely  inoperative  until  after  the  maturity 
of  the  note  and  its  dishonor  by  the  maker.  The  amount  to  be 
paid  is  certain  during  the  currency  of  the  note  as  a  negotiable 
ii-Strument,  and  it  oidy  becomes  uncertain  after  it  ceases  to  be 
negotiable  by  the  default  of  the  maker  in  its  payment.  It  is 
eminently  just  that  the  creditor  who  has  incurred  an  expense  in 
the  collection  of  the  debt  should  be  reimbursed  by  the  debtor 
by  whom  the  action  was  rendered  necessary,  and  the  expense  en- 
tailed." The  statute  has  changed  the  law  in  Maryland  (Maryland 
Fertilizing  Co.  v.  Newman,  60  Md.  584) ;  North  Carolina  (First 
National  Bank  v.  Bynum,  84  N.  C.  24) ;  Pennsylvania  (Woods  v. 
North,  84  Pa.  St.  407).  See  also  Jones  v.  Kodetz,  27  Minn.  240; 
First  Nat.  Bank  v.  Gay,  63  Mo.  38;  First  Nat.  Bank  v.  Larsen, 
60  Wis.  206;  Morgan  v.  Edwards,  53  Wis.  599;  Sylvester  Bleckley 
Co.  V.  Alewine,  48  S.  C.  308.  The  question  does  not  appear  to 
have  been  passed  upon  by  the  New  York  courts.  In  some  States 
a  stipulation  to  pay  a  specified  percentage  as  an  attorney's  fee  is 
void.  Levens  v.  Briggs,  21  Oregon  333.  The  statute,  probably, 
does  not  change  the  law  of  these  States,  since  it  does  not  attempt 
to  validate  such  provisions,  but  merely  declares  that  their  presence 
in  the  instrument  shall  not  affect  its  negotiable  quality. 

§22,  When  promise  is  unconditional. —  An  unqualified 
order  or  promise  to  pay  is  unconditional  wijthin  the  mean- 
ing of  this  act,  though  coupled  with : 

1.  An  indication  of  a  particular .  fund  out  of  which  re- 
imbursement is  to  be  made,  or  a  particular  account  to  be 
debited  with  the  amount^ ^( a)  or 

2.  A  statement  of  the  transaction  which  gives  rise  to  the 
instrument  (b)^^ 


FORM    AND    INTERPRETATION.  II 

But  an  order  or  promises*  to  pay  out  of  a  particular  fund 
is  not  unconditional  (c)-.'--!*^    ^i^^-^!,/u  ^  '^-'    'J- a /.v>^^W*' --*^  -    "^ '"■ 

(a)  The  mere  mention  of  a  fund  in  a  draft  does  not  necessarily  f^^i^^. ._ 
deprive   it   of   the  character   of   commercial   paper,   but    it   must  3  3^ 

further  appear,  in  order  to  have  such  effect,  that  it  contains  either 
an  express  or  implied  direction  to  pay  it  therefrom,  and  not  other- 
wise, ^chmittler  v.  Simon,  101  N.  Y,  554,  560.  In  the  case  cited, 
a  draft  drawn  upon  an  executor  contained  the  words,  "  and  charge 
the  amount  against  me  and  of  my  mother's  estate."  It  was  held 
that  the  reference  to  the  estate  was  not  a  direction  to  pay  out  of 
it,  but  that  the  estate  was  referred  to  simply  as  a  means  of 
reimbursement.  So,  in  Macleod  v.  Luce,  2  Stra.  762 ;  2  Ld.  Raym. 
1481,  where  the  instrument  contained  the  words,  "  as  my  quarterly 
half-pay,  to  be  due  from  24th  of  June  to  2Tth  of  September  next, 
by  advance,"  the  court  said,  "  The  mention  of  the  half -pay  is  only 
by  way  of  direction  how  he  shall  reimburse  himself,  but  the  money 
is  still  to  be  advanced  on  the  credit  of  the  person;"  and  the  court 
accordingly  held  the  instrument  to  be  -a  bill  of  exchange.  Like- 
wise, in  Kedman  v.  Adams,  51  Me.  433,  where  the  drawer  added, 
"  and  charge  the  same  against  whatever  amount  may  be  due  me  for 
my  share  of  fish,"  it  was  held  that  these  words  were  a  mere  indica- 
tion of  the  means  of  reimbursement,  and  did  not  destroy  the  nego- 
tiable character  of  the  draft.  And  a  similar  ruling  was  made  in 
Whitney  v.  Eliot  National  Bank,  137  Mass.  351,  where  the  direc- 
tions were,  "  charge  the  same  to  account  of  250  bbls.  meal  ex- 
schooner  "Aurora  Borealis."  See  also  Nichols  v.  Euggles,  76  Me. 
27.  The  test  is  whether  the  drawee  is  confined  to  the  particulai 
fund,  or  whether,  though  a  specified  fund  is  mentioned,  he  could 
have  the  power  to  charge  the  bill  up  to  the  general  account  of  the 
drawer,  if  the  designated  fund  should  turn  out  to  be  insufficient. 
Plunger  v.  Shannon,  61  N.  Y.  251,  255.  A  draft  in  the  following 
form :  "  Pay  to  the  order  of  the  First  National  Bank  of  Hutchin- 
son, Kansas,  $1,500  on  account  of  contract  between  you  and  the 
Snyder  Plaining  Mill  Company"  was  held  negotiable,  the  words 
"on  account  of,"  etc.,  being  dcomod  an  indication  of  the  fund  to 
which  the  drawee  was  tf)  look  for  reimbursement,  and  not  a  direc- 
tion to  charge  a  particular  fund.  First  Nat.  Bank  of  Hutchinson 
V.  Lightner,  74  Kans.  736. 

(h)  For  example,  a  note  expressed  to  be  in  payment  of  certain 

*  Error  in  engrossing. 


12  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

tracts  of  land  is  ncgotiublc.  Firat  Mat.  Bank  v.  Michatl,  'JG  N.  C. 
53.  The  most  frequent  instances  of  tliis  sort  are  notes  given  in 
payment  of  the  purchase  price  of  goods  and  chattels.  Thus,  in 
Chicago  Railway  Equipment  Co.  v.  Merchants'  Nat.  Bank,  l;56 
U.  S.  208,  it  was  helil  that  the  negotiable  character  of  a  promis- 
sory note  was  not  atfected  by  a  provision  that  it  was  given  with 
others  in  payment  for  certain  cars,  the  title  to  which  should  re- 
main in  the  payee  until  all  the  notes  of  the  series  should  be 
paid.  The  court  said :  "  The  transaction  is,  in  legal  effect,  what 
it  would  have  been  if  the  maker,  who  purchased  the  cars,  had 
given  a  mortgage  back  to  the  payee,  securing  the  notes  on  the 
property  until  they  were  all  fully  paid.  The  agreement,  by  which 
the  vendor  retains  the  title  and  by  which  the  notes  are  secured 
on  the  cars,  is  collateral  to  the  notes,  and  does  not  affect  their 
negotiability.  It  does  not  (lualify  the  promise  to  pay  at  the  time 
fixed,  any  more  than  would  be  done  by  an  agreement  of  the  same 
kind,  embodied  in  a  separate  instrument,  in  the  form  of  a  mort- 
gage." So,  in  Mott  V.  Havana  Nat.  Bank,  22  Hun,  354,  a  like 
ruling  was  made  with  respect  to  a  provision  in  a  note  that  it 
was  to  be  "  in  part  payment  for  a  portable  engine,  which  engine 
shall  be  and  remain  the  property  of  the  owner  of  this  note  until 
the  amount  hereby  secured  is  paid."  So,  where  there  was  a  simi- 
lar recital  as  to  the  title  of  a  piano,  for  the  price  of  which  the 
note  was  given.  Third  Nat.  Bank  v.  Bowman,  50  App.  Div. 
(N.  Y.)  66.  And  so,  where  there  was  a  recital  in  the  note  that  it 
was  "  given  in  consideration  of  a  certain  patent  right."  Hereth 
V.  Meyer,  33  Ind.  511.     But  see  section  330. 

(c)  An  order  on  a  savings  bank,  "  Pay  C,  or  order,  three  hun- 
dred dollars,  or  what  may  be  due  on  my  deposit  book  No.  E,  page 
632,"  is  payable  out  of  a  particular  fund,  and  therefore  not  negoti- 
able under  the  statute.  National  Savings  Bank  v.  Cable,  73  Conn. 
568.  See  also,  Lowery  v.  Steward,  25  N.  Y.  239 ;  Munger  v.  Shan- 
non, 61  N.  Y.  251;  Parker  v.  City  of  Syracuse,  31  N.  Y.  376; 
Morton  V.  Naylor,  1  Hill,  583 ;  Gawken  v.  De  Loraine,  3  Wils.  207. 
In  the  case  first  cited  the  order  was :  "  Please  pay  to  the  order  of 
Archibald  H.  Lowery  the  sum  of  $500  on  account  of  twenty-four 
bales  of  cotton  shipped  to  you  as  per  bill  of  lading,  hy  steamer 
Colorado,  inclosed  to  you  in  letter."  It  was  held  that  this  was 
not  a  bill  of  exchange,  requiring  acceptance  to  bind  the  drawers, 
but  a  specific  draft  or  order  upon  a  particular  fund.  The  language 
of  the  statute  payable  "  out  of  a  particular  fund  "  is  the  equiva- 


FORM    AND    INTERPRETATION.  I3 

lent  of  the  expression  found  in  many  of  the  cases  "  drawn  on 
the  general  credit  of  the  drawer."  Hibbs  v.  Brown,  190  N.  Y. 
167,  175.  A  clause  in  the  trust  deed  securing  payment  of  an  issue 
of  bonds  provided  that,  "  No  present  or  future  shareholder,  officer, 
manager  or  trustee  of  the  Express  Company  shall  be  personally 
liable  as  partner  or  otherwise  in  respect  of  this  bond  or  the  cou- 
pons appertaining  thereto,  but  the  same  shall  be  payable  solely 
out  of  the  assets  assigned  and  transferred  to  the  said  Trust  Com- 
pany or  out  of  other  assets  of  the  Express  Company  :"—iIe?(f, 
that  while  a  joint  stock  association  differs  from  a  corporation 
and  is  like  a  partnership  in  respect  to  the  individual  liability 
of  its  members,  the  association  issuing  the  bonds  must  be  re- 
garded as  a  joint,  quasi  corporate  entity;  that  the  bonds  having 
been  issued  in  its  name,  upon  its  general  credit  and  binding  all 
its  assets,  complied  with  the  requirements  for  a  negotiable  instru- 
ment, even  though  the  practically  unimportant  individual  liability 
of  members  was  excluded;  that  such  exclusion  did  not  constitute 
the  general  assets,  out  of  which  the  bonds  were  payable,  a  par- 
ticular fund  within  the  meaning  of  this  section.     (Id.) 

§  23.  Determinable  future  time ;  what  constitutes. — An 
instrument  is  payable  at  a  determinable  future  time,  within 
the  meaning  of  this  act,  which  is  expressed  to  be  payable: 

1.  At  a  fixed  period  after  date  or  sight;  (a)  or 

2.  On  or  before  a  fixed  or  determinable  future  time  speci- 
fied therein ;   (b)  or 

3.  On  or  at  a  fixed  period  after  the  occurrence  of  a 
specified  event,  which  is  certain  to  happen,  though  the  time 
of  happening  be  uncertain  (c). 

An  instrument  payable  upon  a  contingency  is  not  ne- 
gotiable, and  the  happening  of  the  event  does  not  cure  the 
defect  (d). 

(a)  A  draft  was  drawn  as  follows:  "Mr.  Wm.  Tobo.  Will 
please  pay  to  K.  J.  Tonx^.v  or  order  two  hundred  and  fifty  dollars 
and  charge  to  my  account.  Due  Oct.  1.  John  Ryan:" — Held, 
that  the  words  "due  Oct.  1,"  were  to  bo  construed  ns  payable 
October  1st.  and  hence  that  the  instrument  was  negotiable.  Tor- 
pey  V.  Tebo,  184  Mass.  307. 


14  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

{b)  In  such  a  case  the  legal  rights  of  a  holder  are  clear  and 
cert^iin ;  the  note  is  due  at  a  time  iixcd,  and  it  is  not  due  before. 
The  option  of  tiio  maker,  if  exercised,  would  be  a  payment  in 
advance  of  the  legal  liability  to  pay,  and  nothing  more.  See  Mat- 
tison  V.  Marks,  31  Mich.  421;  Smith  v.  Ellis,  29  Me.  422;  Bu- 
chanan V.  Wren  (Tex.)  30  S.  W.  Kep.  1077;  Riker  v.  Sprague 
Mfg.  Co.,  14  R.  I.  402;  Kiskadden  v.  Allen,  7  Colorado  20G; 
Jordan  v.  Tate,  19  Ohio  St.  58G;  Albertson  v.  Laughlin,  173  Pa. 
St.  525.  Thus,  where  the  note  was  made  payable  twelve  months 
after  date,  or  before,  if  the  money  was  made  out  of  the  sale  of 
a  machine,  it  was  held  to  be  negotiable.  Ernsrt  v.  Steckman,  74 
Pa.  St.  13.  So,  in  Ackley  School  District  v.  Hall,  113  U.  S.  135, 
140,  it  was  held  that  municipal  bonds,  issued  under  a  statute 
providing  that  they  should  be  payable  at  the  pleasure  of  the  dis- 
trict at  any  time  before  due,  were  negotiable.  The  court  said : 
"  By  their  terms,  they  were  payable  at  a  time  which  must  certainly 
arrive;  the  holder  could  not  exact  payment  before  the  day  fixed 
in  the  bonds;  the  debtor  incurred  no  legal  liability  for  nonpay- 
ment until  that  day  passed."  In  the  Wisconsin  act,  the  words 
"  though  payable  before  then  on  a  contingency  "  are  added.  For 
a  case  applying  the  Wisconsin  statute,  see  Thorp  v.  Mindeman, 
123  Wis.  149. 

(c)  Thus,  a  note  payable  a  certain  number  of  days  after  the 
death  of  the  maker,  or  upon  demand  after  the  death  of  the  maker, 
is  a  good  promissory  note,  because  the  event  is  sure  to  happen. 
Carnwright  v.  Gray,  127  N.  Y.  92 ;  Hegeman  v.  Moon,  131  N.  Y. 
462.  See  also  Shaw  v.  Camp,  160  111.  425;  Martin  v.  Stone,  67  N. 
H.  367;  Price  v.  Jones,  105  Ind.  544;  Bristol  v.  Warner,  19  Conn. 
74.  But  an  instrument  payable  when,  or  in  so  many  days  after, 
"A  shall  become  of  age,"  would  not  be  negotiable,  because  it  is  un- 
certain whether  A  will  live  so  long.  Goss  v.  Nelson,  1  Burr,  226; 
Rice  V.  Rice,  43  App.  Div.  (N.  Y.)  458.  So,  a  note  payable 
"when  A  shall  marry,"  Reason  v.  Garrett,  4  Mod.  242;  or  when 
a  certain  ship  shall  arrive.  Coolidge  v.  Ruggles,  15  Mass.  387; 
Grant  v.  Wood,  12  Gray,  220. 

(d)  Duffield  V.  Johnston,  95  N.  Y.  369;  First  National  Bank  v. 
Alton,  60  Conn.  402.  Thus,  where  an  instrument  is  made  payable 
when  a  certain  person  shall  become  of  age,  the  fact  that  he  actually 
attains  his  majority  does  not  fnake  the  instrument  negotiable. 
Gogs  V.  Nelson,  1  Burr,  226.  But  a  stipulation  on  the  face  of  the 
paper  that  the  sureties  consent  to  an  extension  of  time  for  pay- 


FORM    AND    INTERPRETATION.  1$ 

ment  without  notice  does  not  destroy  the  negotiable  quality  of 
the  instrument.  Farmer  v.  Bank  of  Graettinger,  130  Iowa  469. 
Contra,  Union  Stockyards  Nat.  Bank  v.  Bolan  (Idaho)  93  Pac. 
Rep.  509. 

§  24.  Additional  provisions  not  affecting  negotiability. — 
An  instrument  which  contains  an  order  or  promise  to  do 
any  act  in  addition  to  the  payment  of  money  is  not  ne- 
gotiable. But  the  negotiable  character  of  an  instrument 
otherwise  negotiable  is  not  affected  by  a  provision  which: 

1.  Authorizes  the  sale  of  collateral  securities  in  case  the 
instrument  be  not  paid  at  maturity  (a)  ;  or 

2.  Authorizes  a  confession  of  judgment  if  the  instrument 
be  not  paid  at  maturity  (b)  ;  or 

3.  Waives  the  benefit  of  any  law  intended  for  the  advan- 
tage or  protection  of  the  obligor  (c)  ;  or 

4.  Gives  the  holder  an  election  to  require  something  to  be 
done  in  lieu  of  payment  of  money  (d). 

But  nothing  in  this  section  shall  validate  any  provision 
or  stipulation  otherwise  illegal  (e). 

(a)  Collateral  notes  are  often  non-negotiable  because  of  some 
provision  therein  in  regard  to  the  time  of  payment,  or  because  of 
provisions  requiring  something  to  be  done  in  addition  to  the  pay- 
ment of  money.  But  a  statement  that  collateral  security  has 
been  deposited  for  the  performance  of  the  promise  contained  in 
the  note  is  a  recital  only  which  does  not  affect  its  negotiability. 
Wise  V.  Charlton,  4  A.  &  E.  486;  Fancourt  v.  Thorne,  9  Q.  B.  312. 
And  a  provision  merely  authorizing  the  sale  of  the  collateral,  if 
the  note  be  dishonored,  does  not  have  this  effect.  >^erry  v.  Bigelow, 
128  .\ra9^.  129;  Towiie  v.  Rice,  122  Mass.  67;  Biegler  v.  Merchants' 
Loan  &  Trust  Co..  62  111.  App.  560;  Arnold  v.  Rock  River  Valley 
Union  R.  R.  Co.,  5  Duer,  207.  A  statement,  however,  that  the 
note  is  "given  as  collateral  security  with  agreement"  destroys  its 
negotiablf  character.  /X^ostello  v.  Crowell,  127  Mass.  293. 

(h)  This  provision  was  inserted  in  the  act  to  meet  the  require- 
ments in  some  of  the  States  where  judgment  notes  are  in  use. 
Such  notes  nre  not  known  in  New  York.  In  Pennsylvania  it  was 
held  that  the  warrant  of  attorney  rendered  the  note  non-negotiable. 


; 


l6  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

Overton  v.  Tyler,  3  Pa.  St.  34(5;  Sweenoj'  v.  Thickstuin,  77  Ta. 
St.  13L  A  note  which  authorizes  a  confession  of  judgment  ut 
any  time  after  its  date,  whether  duo  or  not.  is  not  negotiahle 
under  the  statute;  for  as  the  time  of  payment  will  thus  depend 
upon  the  whim  or  caprice  of  the  holder,  it  is  absolutely  uncertain. 
Wisconsin  Yearly  Meeting  of  Freewill  Baptists  v.  Barber,  115 
Wis.  289. 

(c)  In  some  of  the  States  it  is  a  common  practice  to  insert  in 
promissory  notes  a  waiver  of  the  benefits  of  homestead  and  exemp- 
tion laws,  and  this  provision  of  the  act  is  designed  to  meet  such 
cases.  See  Zimmerman  v.  Anderson,*^7  Pa.  St.  421;  Zimmerman 
V.  Rote,  75  Pa.  St.  188. 

(d)  An  illustration  of  this  case  is  the  right  of  the  holder  to 
elect  to  take  stock  of  a  corporation  in  lieu  of  payment  in  money. 
Hodges  V.  Shuler,  22  N.  Y.  114.  As  the  obligation  of  the  maker  is 
to  pay  in  money,  and  as  the  payment  in  stock  is  not  optional  with 
him,  the  note  is  not  within  the  rule  that  a  negotiable  instrument 
must  not  be  payable  in  the  alternative. — Id. 

(e)  The  object  of  this  provision  is  to  prevent  any  inference  of      / 
an  intent  to  validate  any  agreement  or  stipulation  mentioned  in        / 
the  section,  where,  by  any  statute  or  settled  policy  of  the  State,  the 
same  would  be  illegal.    In  the  Wisconsin  Act  the  following  words 
are  added :  "  or  authorize  the  waiver  of  exemptions  from  execu- 
tion." 

§25.  Omissions;  seal;  particular  money. —  The  validity 
and  negotiable  character  of  an  instrument  are  not  affected 
by  the  fact  that: 

1.  It  is  not  dated  (a)  ;  or 

2.  Does  not  specify  the  value  given,  or  that  any  value  has 
been  given  therefor  (&)  ;  or 

3.  Does  not  specify  the  place  where  it  is  drawn  or  the 
place  where  it  is  payable  (c)  ;  or 

4.  Bears  a  seal  (d)  ;  or 

5.  Designates  a  particular  kind  of  current  money  in  which 
payment  is  to  be  made  (c). 

But  nothing  in  this  section  shall  alter  or  repeal  any  statute 
requiring  in  certain  cases  the  nature  of  the  consideration  to 
be  stated  in  the  instrument  (/). 


FORM    AND    INTERPRETATION^.  I7 

'/{a)  Church  v.  Stevens,  107  N.  Y.  Supp.  310.  See  section  36, 
which  provides  that  "  where  the  instruineut  is  not  dated,  it  will 
be  considered  to  be  dated  as  of  the  time  it  wag  issued."  As 
between  the  immediate  parties  parol  evidence  is  admissible  to 
show  the  true  date  of  a  misdated  note.  Bigge  v.  Piper,  86  Tenn. 
589. 

(h)  This  was  the  general  rule  at  common  law.  Daniel  on 
Negotiable  Instruments,  §  108.  But  formerly  in  Connecticut  a 
promissorj^  note,  not  purporting  on  its  face  to  be  for  value  re- 
ceived did  not  import  a  consideration.  »^dgerton  v.  Edgerton,  8 
Conn.  6;  Bristol  v.  Warner,  19  Conn.  7. 

(c)  See  sections  22,  54,  137. 

(d)  Prior  to  the  statute  the  Court  of  Appeals  of  New  York 
held  that  the  commercial  paper  of  a  corporation  did  not  lose 
the  quality  of  negotiability  by  having  attached  thereto  the  cor- 
porate seal.  Chase  Xat.  Bank  v.  Faurot,  149  N.  Y.  532 ;  Weeks  v. 
Esler,  143  N.  Y.  374.  See  also  Mackay  v.  St.  Mary's  Church,  15 
K.  I.  121.  The  same  rule  had  been  applied  to  municipal  bonds 
under  seal.  Bank  of  Eome  v.  Village  of  Eome,  19  N.  Y.  20; 
Mercer  County  v.  Racket,  1  Wall.  83.  And  to  the  bonds  of  private 
corporations.  Brainard  v.  N.  Y.  &  II.  K.  E.  Co.,  25  N.  Y.  496. 
So  it  was  held  that  the  negotiability  of  a  United  States  treasury 
note  was  not  restrained  or  affected  by  the  fact  that  it  was  under 
the  treasury  seal.  Dinsmore  v.  Duncan,  57  N.  Y.  573.  In  Mercer 
County  V.  ITacket,  supra,  it  was  said  by  Justice  Geier,  speaking  of 
bonds  issued  under  seal :  "  But  there  is  nothing  immoral  or  con- 
trary to  good  policy  in  making  them  negotiable  if  the  necessities 
of  commerce  require  that  they  should  be  so.  A  mere  technical 
dogma  of  the  courts  or  the  common  law  cannot  prohibit  the  com- 
mercial world  from  inventing  or  is.<?uing  any  species  of  security 
not  known  in  the  last  century^."  See  also  Mason  i'.  Frick,  105  Pa. 
St.  102  and  cases  cited;  ]\rorris  Canal,  etc.,  Co.  v.  Fisher,  9  N.  J. 
Eq.  699;  National  Exchange  Bank  v.  Hartford  P.  &  F.  E.  Co., 
8  E.  I.  375;  Jackson  v.  Myers,  43  Md.  452;  Muth  v.  Dolficld.  43 
Md.  466.  Contra.  Osborne  v.  Hubbard,  20  Oregon  318.  The 
rule  adopted  in  the  act  existed  by  statute  in  the  following  States: 
Colorado.  Florida,  Georgia,  Illinois,  Kansas,  Massachusetts,  Ne- 
braska. North  Carolina,  Ohio,  and  Tennessee. 

(e)  Thus,  a  note  payable  in  gold  coin  is  negotiable.     Chrysler 
V.  Griswf.ld,  43  N.  Y.  209.     So  is  a  note  payable  "in  l)aiik  notes 
current  in  tlie  city  of  Now  York."     Keith  v.  Jones,  9  Johns.  120. ^'^ 
2 


l8  THE    iNEGOTIABLE    INSTRUMENTS    LAW. 


i 


A  note  payable  "  in  New  York  State  bills  or  specie."  Judah  v. 
Harris,  19  Johns.  144.  And  a  note  payable  "  in  current  Florida 
funds."  Williams  v.  Moselcy,  2  Fla.  304.  ;  J3ut  sec  Wright  v. 
Hart's  Adnn-.,  44  Pa.  St.  454,  where  it  was  held  that  a  note  pay- 
able "  in  current  funds  at  Pittsburgh "  was  not  negotiable.  See 
also  Ford  r.  Mitchell,  15  Wis.  304;  Piatt  v.  Tlie  Sauk  County 
Bank,  17  Wis.  222 ;  Lindsey  v.  McClelland,  18  Wis.  481 ;  Klauber 
c.  Biggerstoff,  47  Wis.  551. 

(/)  In  a  number  of  the  States  it  is  required  that  notes  given  in 
payment  of  patent  rights  shall  have  written  on  the  face  thereof 
"given  for  a  patent  right."  So,  there  are  statutes  requiring  that 
what  are  known  as  "  Bohemian  oats  "  notes  shall  state  the  nature 
of  the  consideration  for  which  they  were  given.  And  so,  there 
are  statutes  which  require  this  in  the  case  of  notes  given  in  pay- 
ment for  lightning  rods  or  stallions,  or  notes  given  to  "  ped- 
dlers." The  above  provision  is  intended  to  prevent  any  repeal  of 
such  statutes.  The  New  York  statutes  on  the  subject  have  been 
incorporated  into  the  act.     See  sections  330,  331. 

§  26.  When  payable  on  demand. — An  instrument  is  pay- 
able on  demand: 

1.  Where  it  is  expressed  to  he  payable  on  demand,  or  at 
sight  (a),  or  on  presentation;  or 

2.  In  which  no  time  for  payment  is  expressed  (b). 
Where  an  instrument  is  issued,  accepted  or  indorsed  when 

overdue,  it  is,  as  regards  the  person  so  issuing,  accepting  or 
indorsing  it,  payable  on  demand  (c). 

(a)  By  the  law  merchant  there  are  some  distinctions  between 
instruments  payable  on  demand  and  those  payable  at  sight ;  as,  foi 
example,  in  the  matter  of  days  of  ^ace.  See  Daniel  on  Negoti- 
able Instruments,  §§  617-619,  and  authorities  there  cited.  This 
was  also  the  effect  of  former  statutes  in  some  of  the  States. 
Walsh  V.  Dart,  12  Wis.  635.  The  new  statute  abolishes  all  these 
distinctions. 

(b)  Mes?more  v.  Morrison,  172  Pa.  St.  300;  Hall  v.  Toby,  110 
Pa.  St.  318;  James  v.  Brown,  11  Ohio  St.  601;  Holmes  v.  West,  17 
Cal.  623;  Porter  v.  Porter,  51  Me.  376;  Keyes  v.  Feustomaher,  24 
Cal.  329;  Bank  v.   Price,  52  Iowa  530;  Libby  v.  Mekelborg,  28 


FORM    AND    INTERPRETATION.  I9 

Minn.  38;  Roberts  v.  Snow,  28  Neb.  425;  Bacon  i;.  Page,  1  Conn. 
405;  Eaymond  v.  Selliek,  10  Conn.  485;  Dodd  v.  Denny,  6  Oregon 
156.  And  the  legal  intendment  that  the  instrument  is  payable  on 
demand  cannot  be  changed  by  parol  proof.  Roberts  v.  Snow,  28 
Neb.  425 ;  Thompson  ik  Ketcham,  8  Johns.  146 ;  Sheldon  v.  Heaton, 
88  H>m,  535 ;  Gaylord  v.  Van  Loan,  15  Wend.  308 ;  McLeod  v.  Hun- 
ter/29  Misc.  N.  Y.  558  (a  case  arising  under  the  statute)  ;  Koehn- 
ing  V.  Muenuniughoff,  61  Mo.  403 ;  Self  v.  King,  28  Tex.  552.  The 
words  "  on  demand  "  may  be  added  without  avoiding  the  instru- 
ment.    Byles  on  Bills,  210. 

(c)  Berrj'  v.  Robinson,  9  Johns.  12J;  Leavitt  v.  Putnam,  1 
Sandf.  199;  Bassonhoi-st  v.  Wilby,  45  Ohio  St.  336;  Light  v. 
Kingsbury,  50  Mo.  331;  Smith  v.  Oaro,  9  Oregon  280;  Bemis  v. 
McKenzie,  13  Fla.  553.  It  is  commonly  said  that  the  indorsement 
of  a  bill  or  note  which  is  overdue  is  equivalent  to  drawing  a  new 
instrument  payable  at  sight.  Bishop  v.  Dexter,  2  Conn.  419; 
Mudd  V.  Harper,  1  Md.  110.  In  such  cases  presentment  for  pay- 
ment must  be  made  and  notice  of  dishonor  given,  as  in  other 
instances  of  instruments  payable  on  demand.  Berry  v.  Robinson, 
9  Johns.  121;  Van  Iloosen  v.  Van  Alstyne,  9  Wend.  79;  Poole  v. 
Tolleson,  1  McCord,  200;  Patterson  v.  Todd,  18  Pa.  St.  420; 
Rosson  V.  Carroll,  90  Tenn.  90;  Brown  v.  Hull,  33  Gratt.  23. 
Where  a  note,  negotiated  before  due,  is  further  negotiated  after 
it  has  been  dishonored,  the  holder  takes  the  legal  title,  and  can 
maintain  a  suit  upon  it  in  his  own  name,  in  the  same  manner  as 
if  he  had  received  it  before  it  was  due.  French  v.  Jarvis,  29 
Conn.  353. 

§  27.  When  payable  to  order. —  The  instrument  is  pay- 
able to  order  wiiere  it  is  drawn  payable  to  the  order  of  a 
specified  person  or  to  him  or  his  order  (a).  It  may  be  drawn 
payable  to  the  order  of : 

I,  A  i)ayee  who  is  not  maker,  drawer  or  drawee;  or 
■^-2.,  The  drawer  or  maker  (b)  ;  or 

3.  'II le  drawee;  or 

4.  'Iwo  or  more  payees  jointly ;  or 

5.  One  or  some  of  several  payees  (c)  ;  or 

6.  The  hoMcr  of  an  office  for  the  time  bcini^  (d). 


OU    ^  M'-j 


vx 


JO  TiiK  m:c;otiai{le  instruments  law. 

Where  the  instrument  is  payable  to  order  the  payee  must 
be  nametl  or  otherwise  indicated  therein  with  reasonable 
certainty  (e). 

(a)  By  the  rules  of  the  law  merchant  an  instrument  payable  to 
a  specified  person  without  the  addition  of  the  word  "  order,"  or 
other  word  of  similar  import,  was  not  negotiable.  Byles  on  Bills, 
p.  S3;  Smith  v.  Kendall,  0  T.  R.  12o ;  Maule  v.  Crawford,  14  Ilun, 
1U3;  Carnwright  v.  Gray,  127  N.  Y.  92.  The  English  Bills  of  Ex- 
change Act  provides  that  "  a  bill  is  payable  to  order  which  is 
expressed  to  be  so  payable,  or  which  is  expressed  to  be  payable  to 
a  particular  pei'son,  and  does  not  contain  words  prohibiting  trans- 
fer or  indicating  an  intention  that  it  should  not  be  transferable." 
But  this  change  in  the  law  was  not  deemed  advantageous,  and 
was  not  adopted. 

(h)  A  note  payable  to  the  order  of  the  maker  is  not  complete 
iiutil  indorsed  by  him.     Section  320. 

(c)  Illustration:  A  draft  payable  to  A,  B,  and  C,  or  either  of 
them,  or  any  two  of  them. 

(d)  For  example,  a  note  payable  to  three  persons  as  tinistees  of 
an  incorporated  association,  or  iheir  successors  in  office,  is  nego- 
tiable.    Davis  V.  Gore,  6  N.  Y.  124. 

(e)  The  payee  need  not  be  designated  by  name.  If  his  identity 
can  be  ascertained  with  certainty,  it  is  sufficient.  *^nited  States  v. 
White,  2  Hill,  59;  Blackman  v.  Lehman,  63  Ala.  547. 

§  28.  When  payable  to  bearer. —  The  instrument  is  pay- 
able to  bearer: 

1.  When  it  is  expressed  to  be  so  payable;  or 

2.  W'hen  it  is  payable  to  a  person  named  therein  or 
bearer  (a)  ;  or 

3.  When  it  is  payable  to  the  order  of  a  fictitious  or  non- 
existing  person,  and  such  fact  was  known  to  the  person 
making  it  so  payable  (b)  ;  or 

4.  Wlien  the  name  of  the  payee  does  not  purport  to  be  the 
name  of  any  person  (c)  ;  or 


FORM    AND    INTERPRETATION.  21 

5.  When  the  only  or  last  indorsement  is  an  indorsement 
in  blank  (d). 

(a)  Illustration:  Instrument  payable  to  "A.  B.,  or  bearer."  In 
such  case  it  is  negotiable  by  deliverj%  and  the  indorsement  of  A. 
B.  is  not  necessary  to  pass  the  title  therein.     See  section  GO. 

(fe)  It  is  essential  that  the  fictitious  character  of  the  payee 
should  be  known  to  the  person  making  the  instrument  so  payable. 
As  said  by  the  Court  of  Appeals  of  New  York,  in  Shipman  v. 
Bank  of  the  State  of  New  York,  126  N.  Y.  318,  "  The  maker's 
intention  is  the  controlling  consideration  which  determines  the 
character  of  such  paper.  It  cannot  be  treated  as  payable  to 
bearer  unless  the  maker  knows  the  payee  to  be  fictitious,  and 
actually  intends  to  make  the  paper  payable  to  a  fictitious  i)erson." 
Hence,  if  the  maker  or  drawer  supposes  the  payee  to  be  an  actu- 
ally existing  person  (as,  for  instance,  where  he  is  induced  by 
fraud  to  draw  the  instrument  to  the  order  of  a  fictitious  person 
whom  he  supposes  to  exist),  the  instrument  will  not  be  payable 
to  bearer,  and  no  person  can  acquire  the  title  thereto  by  delivery. 
And  where  the  instrument  is  drawn,  payable  at  a  bank,  the 
bank  cannot  charge  the  same  to  the  account  of  its  customer, 
since  the  instrument  is  not  in  such  case  payable  to  bearer,  and 
the  indorsement  is  a  forgery.y/Shipman  v.  Bank  of  the  State  of 
New  York,  supra;  Armstrong  v.  Bank,  46  Ohio  St.  412;  Bank  of 
England  v.  Vagliano  [1891],  App.  Cas.  107.  But  see  Clutton  v. 
Attenborough  [1895],  2  Q.  B.  707.  It  has  been  held  that  a  note 
made  payable  to  the  order  of  the  estate  of  a  deceased  person  is 
a  promissory  note  with  a  fictitious  payee,  and  that  where  it  has 
been  Tiegotiated  by  the  maker  it  is  deemed  as  against  him  to  be  a 
note  payable  to  bearer.  Lewisohn  v.  The  Kent  &  Stanley  Co., 
87  TTun,  2r)7.  But  the  correctness  of  this  view  seems  very  ques- 
tionable. The  ground  of  the  rule  is  that,  as  the  fictitious  payee 
raniK)t  indorse  the  instrument,  the  drawer  or  maker  musft  have 
inten<l('d  tliat  it  should  be  payable  to  bearer.  But  no  such  inten- 
tion can  properly  he  ascribed  where  the  instrument  is  drawn  i>iiy- 
able  to  thf  order  of  an  estate;  for  llie  obvious  inteiifi<in  is  tlint 
it  shall  be  paid  upon  the  order  of  the  decedent's  legal  representa- 
tivcH,  and  that  they  shall  iuflorse  the  paper.  Checks  are  frequently 
drawn  in  thin  way,  and  it  appears  to  bo  the  understanding  of  the 
business  community  that  they  require  the  indorsement  of  the 
executor  or  administrator. 


THE    NEGOTIABLE   INSTRUMENTS    LAW. 

(c)  For  example,  a  chcvk  payable  to  "  cash  "  or  to  "  sundries." 
See  Willets  v.  rha>nix  Jiauk,  2  Duer,  liil;  Mechanics'  Bank  v. 
Strattun,  2  Koyes,  365. 

{d)  If  the  maker  of  a  promissoiy  note  wrongfully  obtains  pos- 
session of  it  after  it  has  been  indorsed  in  blank  by  tlie  payee,  he 
is  the  bearer  within  the  meaning  of  the  statute.  Massachusetts 
National  Bank  v.  Snow,  187  Mass.  159. 

§  29.  Terms  when  sufficient, —  The  instrument  need  not 
follow  the  language  of  this  act,  but  any  terms  are  sufficient 
which  clearly  indicate  an  intention  to  conform  to  the  re- 
quirements hereof  (a). 

(a)  It  may  be  written  in  a  foreign  language  as  well  as  in  Eng- 
lish. Debebian  v.  Gala,  64  Md.  2G2,  265.  The  writing  may  be  in 
pencil  as  well  as  in  ink.  Brown  v.  Butchers'  Bank,  6  Hill,  443. 
As  to  the  construction  of  ambiguous  instruments,  see  section  36. 

§  30.  Date,  presumption  as  to. —  Where  the  instrument 
or  an  acceptance  or  any  indorsement  thereon  is  dated,  such 
date  is  deemed  prima  facie  to  be  the  true  date  of  the  making, 
drawing,  acceptance  or  indorsement,  as  the  case  may  be  (a). 

(a)  But  evidence  is  admissible,  as  between  the  immediate 
parties,  to  show  a  mistake  in  the  date.  Cowing  v.  Altman,  71 
N.  Y.  441.  If  the  date  is  an  impossible  one,  the  law  will  adopt  the 
nearest  day.  Thus,  if  the  date  is  written  September  31st,  the 
true  date  will  l)e  deemed  to  be  September  30th.  Wagner  v.  Ken- 
ner,  2  Bob.  (La.)  120. 

§  31.  Ante-dated  and  post-dated. —  The  instrument  is 
not  invalid  for  the  reason  only  that  it  is  ante-dated  or  post- 
dated, provided  this  is  not  done  for  an  illegal  or  fraudulent 
purpose.  The  person  to  whom  an  instrument  so  dated  is 
delivered  acquires  the  title  thereto  as  of  the  date  of  deliv- 
ery (a)^  ^ 

(a)  A  post-dated  bill  or  check  may  be  negotiated  before  the  day 
of   its   date,  v13rewster   v.   McCardle,   8   Wend.   478;   Pasmore  v. 


FORM    AND    INTERPRETATION.  23 

North,  13  East,  517.  In  the  case  last  cited  the  payee  -who  had 
negotiated  a  post-dated  bill  died  the  day  before  the  day  of  date; 
but  it  was  held  that  the  indorsee  had  derived  title  through  such 
payee,  and  could  recover  of  the  drawer.  If  for  the  purpose  of 
evading  the  law,  a  false  date  is  inserted  in  the  instrument,  it 
will  be  void  as  to  all  persons  having  notice.  Serle  v.  Norton,  9 
M.  &  W.  309. 

§  32.  When  date  may  be  inserted. —  \\here  an  instru- 
ment expressed  to  be  payable  at  a  fixed  period  after  date 
is  issued  undated,  or  where  the  acceptance  of  an  instrument 
payable  at  a  fixed  period  after  sight  is  undated,  any  holder 
may  insert  therein  the  true  date  of  issue  or  acceptance,  and 
the  instnmient  shall  be  payable  accordingly  (a).  The  inser- 
tion of  a  wrong  date  does  not  avoid  the  instrument  in  the 
hands  of  a  subsequent  holder  in  due  course ;  but  as  to  him, 
the  date  so  inserted  is  to  be  regarded  as  the  true  date  (&). 

(a)  See  next  section.  >/^ 

(b)  Redlich  v.  Doll,  54  N.  Y.  238;  Page  v.  Monell,  3  Abb.  Ct. 
App.  Dec.  433;  Mitchell  v.  Culver,  7  Cow.  336. 

§33.  Blanks;  when  may  be  filled. —  Where  the  instru- 
ment is  wanting  in  any  material  particular,  the  person  in 
possession  thereof  has  a  prima  facie  authority  to  complete 
it  by  fining  up  the  blanks  therein/(a).  And  a  signature 
on  a  blank  paper  delivered  by  the  person  making  the  signa- 
ture in  order  that  the  paper  may  be  converted  into  a 
negotiable  instrument  operates  as  a  prima  facie  authority  to 
fill  it  up  as  such  for  any  amount  (b).  In  order,  however, 
that  any  such  instrument,  when  completed,  may  be  enforced 
against  any  person  who  became  a  party  thereto  prior  to  its 
completion,  it  must  be  filled  up  strictly  in  accordance  with 
the  authority  given  and  within  a  reasonable  time.  But  if  any 
such  instrument,  after  completion,  is  negotiated  to  a  holder 
in  due  course  (c),  it  is  valid  and  effectual  for  all  purposes 


24  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

in  his  hands,  and  he  may  enforce  it  as  if  it  had  been  filled 
up  strictly  in  accordance  with  the  authority  given  and 
within  a  reasonable  time  ((/). 

(a)  The  leading  authority  upon  this  point  is  Kussell  v.  Lang- 
staffe,  2  Doug.  514.  In  that  case  a  person  had  indorsed  his  name 
on  five  copperplate  checks,  blank  as  to  amounts,  dates  and  times 
of  payment,  and  the  holder,  Galley,  tflled  them  up  as  his  own  notes 
with  different  dates,  aniuunts  and  times  of  payment.  The  indorser 
was  held  liable  to  the  plaintiff,  who  had  discounted  them.  Lord 
Mansfield  said :  "  The  indorsement  on  a  blank  note  is  a  letter  of 
credit  for  an  indefinite  sum.  The  defendant  said :  *  Trust  Galley 
for  any  amount,  and  I  will  be  his  security.'  It  does  not  lie  in  his 
mouth  to  say  the  indorsement  was  not  regular."  See  also  Ovrick 
I'.  Colston,  7  Gratt.  189;  Frank  v.  Lilienfeld,  33  Gratt.  377;  Boyd 
V.  McCann,  10  Md.  118;  Elliot  v.  Chestnut,  30  Md.  562;  Andros- 
coggin Bank  V.  Kimball,  tf6  Cush.  373.  If  the  place  for  the  name 
of  the  payee  is  left  blank  the  holder  may  fill  it  up  with  his  own 
name  as  payee,  i^oyd  v.  McCann,  10  Md.  118.  But  it  will  be 
noticed  that  the  authority  is  only  to  complete  the  instrument,  for 
while  there  is  an  authority  to  fill  up  blanks  in  order  to  make  the 
instrument  complete  as  such,  there  is  no  authority  to  insert  a 
special  agreement  not  essential  to  the  completeness  of  the  instru- 
ment. >A\"eyerhauser  v.  Dunn,  100  N.  Y.  150.  It  will  also  be 
noticed  that,  except  where  the  paper  has  been  negotiated  to  a 
holder  in  due  course,  the  presumption  of  authority  is  not  abso- 
lute, but  only  prima  facie.  Where  the  amount  is  stated  in  fig-urcs 
in  the  margin,  and  a  blank  space  is  left  for  the  amount  in  the 
body,  of  the  instrument,  it  is  not  complete  until  the  blank  is 
filled  up.  Chestnut  v.  Chestnut,  104  Va.  539;  Hallen  v.  Davis, 
59  Iowa,  444;  Norwich  Bank  v.  Hyde,  13  Conn.  281;  Schreyer  v. 
Hawkes,  22  Ohio  St.,  308,  315;  Garrard  v.  Lewis,  L.  R.  10  Q.  B. 
Div.  30. 

(h)  It  is  to  be  observed  that  this  rule  applies  only  where  the 
incomplete  instrument  has  been  delivered.     See  next  section. 

(c)  As  the  statute  applies  only  to  a  person  to  whom  the  instru- 
ment has  been   negotiated,  a  payee,  to  whom   paper  is  delivered 
after  it  has  been  filled  up  without  authority,   is  not  within  the 
protection  of  this  clause.     Vander  Ploeg  v.  Van  Zunk  (Iowa)  112  r 
N.  W.  Rep.  807.     In  the  case  cited  the  defendants  placed  their 


FORM    AND    INTERPRETATION.  25 

signatures  on  a  blank  printed  form  at  the  request  of  P,  who  was 
a  partner  of  one  of  them  in  a  mercantile  business,  on  the  repre- 
sentation that  he  might  find  it  necessary  to  raise  $150  or  $200 
for  temporary  use  in  the  business.  Afterwards  P,  being  indebted 
on  his  individual  account  to  the  plaintiff,  filled  out  the  form  for 
$2,000  payable  to  the  order  of  the  plaintiff,  and  delivered  the 
same  to  the  plaintiff  without  authority  from  the  defendants : — 
Held,  that  the  plaintiff  could  not  be  deemed  a  holder  in  due 
course,  since  he  was  a  party  to  the  original  contract,  and  not  a 
person  to  whom  the  paper  had  been  negotiated.  The  court  said: 
"  It  seems  to  us  under  these  definitions  and  the  application  thereof 
the  plaintiff  was  a  holder  of  the  note,  but  not  a  holder  in  due 
course.  The  latter  term  seems  unquestionably  to  be  used  to  indi- 
cate a  person  to  whom  after  completion  and  delivers-  the  instru- 
ment has  been  negotiated.  In  an  ordinary  case  [the  payee]  is 
the  person  with  whom  the  contract  is  made,  and  his  rights  are 
not  in  general  dependent  on  any  peculiarities  in  the  law  of 
negotiable  instruments.  The  peculiarities  of  that  law  distinguish- 
ing negotiable  instruments  from  other  contracts  relate  to  a  holder 
who  has  taken  by  negotiation,  and  not  ag  an  original  party." 
See  also  Guerrant  v.  Guerrant,  7  Va.  Law  Reg.  637;  Herdman  v. 
Wheeler,  1  K.  B.  (1902)  361. 

((/)  If  the  instrument  be  used,  or  the  blanks  filled  up  contrary 
to  the  agreement  or  intention  of  the  original  parties,  the  maker 
is  held  to  any  bona  fide  holder  for  value,  upon  the  principle  that 
where  one  or  two  innocent  parties  must  suffer  by  the  fraud  or 
wrong  of  a  third  person  the  one  who  put  it  in  the  power  of  such 
third  person  to  commit  the  fraud  or  wrong  must  bear  the  loss. 
Tlie  liability  of  the  maker  in  such  case  has  also,  sometimes,  been 
placed  upon  the  principle  of  estoppel;  he,  having  put  his  paper  in 
circulation,  and  thus  invitetl  the  public  to  receive  it  of  any  one 
having  apparent  title,  is  ei?topped  to  urge  the  actual  defect  of 
title  against  a  bona  fide  holder.  Redlich  v.  Doll,  54  N.  Y.  234, 
238.  WTiere  one  makes  and  delivers  a  promissory  note,  perfect  in 
form,  except  that  a  blank  is  left  after  the  word  "  at "  for  the  place 
of  payment,  there  is  an  implied  authority  for  any  bona  fide  holder 
to  fill  the  blank,  and  the  insertion  of  a  place  of  payment,  >and 
negotiation  of  the  note,  contrary  to  the  agreement  of  the  original 
parties,  does  not  avoid  it  in  tlie  hands  of  a  bona  fidr  holder  of 
value.  (Id.)  So,  one  who  intrusts  another  with  his  blank  accept- 
ance is  lialilf  to  a  bolder  for  value,  though  filled   up  for   a  sum 


26  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

exceeding  that  limited  by  the  acceptor.  Viin  Duzer  r.  Howe,  21 
N.  Y.  531.  But  where  the  amount  is  left  blank  in  the  body  of 
the  note,  and  a  sum  is  indicated  in  fii^ures  in  the  margin,  the 
amount  cannot  be  filled  in  for  a  larger  sum  than  that  so  indi- 
cated.    Norwich  Bank  v.  Ilydo,  13  Conn.  284. 

§34.  Incomplete  instrument  not  delivered. —  Where  ^an 
incomplete  instrument  has  not  been  delivered  it  will  not,  if 
completed  and  negotiated,  without  authority,  be  a  valid  con- 
tract in  the  hands  of  any  holder,  as  against  any  person 
whose  signature  was  placed  thereon  before  delivery  (a), 

(a)  A  negotiable  instrument  must  be  complete  and  perfect  when 
it  is  issued,  or  there  must  be  authority  reposed  in  some  one  after- 
ward to  supply  any  thing  needed  to  make  it  perfect.  Sedgwick  v. 
McKim,  53  N.  Y.  307.  313;  Davis  Sewing  Machine  Co.  v.  Best, 
105  N.  Y.  59,  67.  And  mere  negligence  on  the  part  of  the  person 
sought  to  be  held  liable  will  not  be  sufficient  to  entitle  the  holder 
to  recover  of  him  on  the  instrument.  Baxendale  v.  Bennett,  L. 
K.  3  Q.  B.  Div.  525.  Thus,  in  the  case  cited,  where  a  blank  ac- 
ceptance which  had  been  given  to  one  person  and  returned  by 
him  was  afterward  stolen  from  the  acceptor  and  another  person 
filled  in  his  own  name  and  negotiated  the  bill,  it  was  held  that 
there  could  be  no  recovery  on  such  acceptance  even  by  a  bona  fide 
holder  for  value.  Barnwell,  L.  J.,  said :  "  The  defendant  here 
has  not  voluntarily  put  into  any  one's  hands  the  means,  or  part 
of  the  means,  for  committing  a  crime.  But  it  is  said  that  he  had 
done  so  through  negligence.  I  confess  I  think  he  has  been  negli- 
gent—  that  is  to  say,  I  think  if  he  had  had  this  paper  from  a 
third  person  as  a  bailee  bound  to  keep  it  with  ordinary  care,  he 
woidd  not  have  done  so.  But  then  this  negligence  is  not  the 
proximate  or  effective  cause  of  the  fraud.  A  crime  was  necessary 
for  its  completion." 

Where  a  promissory  note  is  delivered  by  the  maker  to  the  payee, 
upon  a  verbal  agreement  that  the  instrument  shall  not  take  effect 
until  other  persons  shall  have  signed,  the  paper  will  have  no 
validity  as  between  the  original  parties,  unless  so  completed. 
Hodge  V.  Smith,  130  Wis.  326.  If  only  part  of  such  other  signa- 
tures be  obtained,  the  party  first  signing  may  defend  on  the  ground 
that  the  instrument  was  never  either  completed  or  delivered,  while 
the  other  parties  may  defend  on  the  ground  of  fraud,  even  though 


FORM    AND    INTERPRETATION.  2/ 

they  themselves  signed  unconditionally,  for  the  reason  that  the 
paper  never  took  effect  as  to  the  conditional  maker.     (Id.) 

A  woman  delivered  to  her  husband  a  check  signed  by  her  and 
made  payable  to  a  certain  creditor,  but  with  the  amount  left  blank, 
instructing  her  husband  to  apply  it  in  payment  of  her  debt,  and 
the  husband  delivered  it  to  the  creditor  with  the  blank  unfilled, 
to  be  used  as  a  pajnuent  upon  a  debt  of  his  own  to  the  same 
creditor,  and  allowed  the  creditor  with  his  consent  to  fill  in  the 
blank  with  a  certain  amount  as  such  payment: — Held,  that  the 
check  was  an  incomplete  instiniment  under  this  section,  and  that 
in  an  action  brought  by  the  creditor  against  the  woman  for  her 
indebtedness  to  him,  alleged  to  be  unpaid,  she  could  produce  evi- 
dence to  show  that,  by  the  authority  actually  given  him,  her  hus- 
band had  no  right  to  treat  the  check  as  he  did  or  to  apply  it 
otherwise  than  in  payment  of  her  debt.  Boston  Steel  &  Iron  Co. 
V.  Steuer,  183  Mass.  140. 

§35.  Delivery;  when  effectual;  when  presumed. —  Every 
contract  on  a  negotiable  instrument  is  incomplete  and  re- 
vocable until  delivery  of  the  instrument  for  the  purpose  of 
giving  effect  thereto  (a).  As  between  immediate  parties,! 
and  as  regards  a  remote  party  other  than  a  holder  in  due 
course,  the  delivery,  in  order  to  be  effectual,. must  be  made 
either  by  or  under  the  authority  of  the  party  making,  draw^ 
ing,  accepting  or  indorsing,  as  the  case  may  be«  and  in 
such  case  the  delivery  may  be  shown  to  have  been  con- 
ditional (b),  or  for  a  special  purpose  only,  and  not  for  the 
purpose  of  transferring  the  property  in  the  instrument.  But 
where  the  instrument  is  in  the  hands  of  a  holder  in  due 
course,  a  valid  delivery  thereof  by  all  parties  prior  to  him 
so  as  to  make  them  liable  to  him  is  conclusively  presumecl^ 
(c).  And  where  the  instniniciit  is  no  longer  in  the  posses- 
sion of  a  party  whose  signature  appears  thereon,  a  valid  and 
intentional  delivery  by  him  is  presumed  until  the  contrary 
is  proved  (d). 

(a)  Like  other  writt^-n  f'ontraftfl,  a  lull  of  exchango  or  prom- 
isaorj'  note  has  no  legal  inception  or  valid  existence  as  such  until 


} 


28  THE    NEGOTIABLE    INSTRUMENTS    LAW. 

it  has  been  clelivereil  in  accordance  with  tlie  purpose  and  intent 
of  the  parties.  Burson  v.  Huntington,  21  Alich.  410.  This  pro- 
vision of  the  statute  does  not  render  incomplete  a  promissory 
note  indorsed  in  bhmk  by  the  payee  and  afterwards  stolen  from 
him  by  the  maker  and  presented  by  the  thief  to  a  bank  which 
discounts  it  in  good  faith,  because  such  a  note  takes  eifect  when 
delivered  by  the  maker  to  the  payee,  and  is  made  payable  to  bearer 
by  the  payee's  indorsement  in  blank  before  the  theft.  Massachu- 
setts National  Bank  v.  Snow,  187  Mass.  100. 

(h)  Thus,  as  between  the  original  parties,  it  can  be  shown  by 
parol  evidence  that  the  note  although  delivered  was  only  to 
become  binding  in  case  the  maker  sold  certain  bonds  placed  in 
his  hands  as  agent  for  sale.     Hill  v.  Hall,  191  Mass.  253. 

(c)  This  provision  changes  the  law  in  some  of  the  States.  In 
some  cases  it  has  been  held  that  an  instrument  in  the  form  of  a 
regotiable  promissory  note,  which  has  never  been  delivered  by  the 
alleged  maker,  has  no  legal  existence  as  such  note,  and  the  party 
sought  to  be  charged  upon  it  may  always,  unless  estopped  by  his 
own  negligence,  defend  successfully  against  it,  without  regard  to 
the  time  when  or  the  circumstances  under  which  it  was  acquired 
by  the  holder.  Roberts  v.  McGrath,  38  Wis.  52;  Chipman  v. 
Tucker,  38  Wis.  43;  Griffiths  i'.  Kellogg,  39  Wis.  290;  Burson  v. 
Huntington,  21  Mich.  410.  This  change,  like  some  others  made  by 
the  act,  is  in  the  direction  of  facilitating  the  circulation  of  com- 
mercial paper.  The  provision  does  not  apply,  however,  in  the  case 
of  an  incomplete  instrument  completed  and  negotiated  without 
authority.    See  section  34. 

(d)  Possession  of  the  instrument  is  prima  facie  evidence  of 
title.     Newcombe  v.  Fox,  1  App.  Div.  389. 

§  36.  Construction  where  instrument  is  ambiguous. — 
Where  the  lan.q-uage  of  the  instruiTient  is  ambiguous,  or 
there  are  omissions  therein,  the  following  rules  of  construc- 
tion apply: 

I.  Where  the  sum  payable  is  expressed  in  words  and  also 
in  figures  and  there  is  a  discrepancy  between  the  two,  the 
sum  denoted  by  the  words  is  the  sum  payable;  but  if  the 
words  are  ambiguous  or  uncertain,  references  may  be  had 
to  the  figures  to  fix  the  amount  (a)  ; 


FORM    AND    INTERPRETATION.  29 

2.  Where  the  instrument  provides  for  the  payment  of 
interest,  without  specifying  the  date  from  which  interest  is 
to  run,  the  interest  runs  from  the  date  of  the  instrument, 
and  if  the  instrument  is  undated,  from  the  issue  thereof ; 

3.  Where  the  instrument  is  not  dated,  it  will  be  considered 
to  be  dated  as  of  the  time  it  w^as  issued  (t*)  ; 

4.  Where  there  is  a  conflict  between  the  written  and 
printed  provisions  of  the  instrument,  the  written  provisions 
prevail  (c)  ; 

5.  Where  the  instrument  is  so  ambiguous  that  there  is 
doubt  whether  it  is  a  bill  or  note,  the  holder  may  treat  it 
as  either  at  his  election  (d)  ; 

6.  Where  a  signature  is  so  placed  upon  the  instrument 
that  it  is  not  clear  in  what  capacity  the  person  making  the 
same  intended  to  sign,  he  is  to  be  deemed  an  indorser  (e)  ; 

7.  Wliere  an  instrument  containing  the  words  "  I  promise 
to  pay  "  is  sigiied  by  two  or  more  persons,  they  are  deemed 
to  be  jointly  and  severally  liable  thereon  (/). 

(a)  The  figures  in  the  margin  of  a  bill  or  note  are  regarded  as 
simply  a  memorandum  or  abridgement  for  convenience  or  refer- 
ence, and  form  no  part  of  the  instrument.  Smith  v.  Smith,  1 
R.  I.  388;  Norwich  Bank  v.  Hyde,  13  Conn.  281;  Schreyer  v. 
Hawkes,  22  Ohio  St.  308.  Where  the  marginal  figures  of  a  bill 
were  245  1.,  but  the  words  "  two  hundred  pounds  "  were  written 
in  the  body  of  the  instrument,  it  was  held  to  be  for  the  latter 
sum.  Saunderson  v.  Piper,  5  Bing.  N.  C.  425.  In  Garrard  v. 
Lewis  (L.  R.  10  Q.  B.  Div.  30,  32)  koifl  Justice  Bowen,  speaking 
of  the  import  and  eflFect  of  marginal  figures  at  the  head  of  a  bill 
of  exchange,  said:  "They  do  not  seem  in  general  to  have  been 
considered  among  merchants  as  of  the  same  effect  and  value  as 
the  mention  of  the  sum  contained  In  the  body  of  the  bill.  Tlie 
history  of  these  marginal  figures  iiiny  perhaps  be  shmtly  sum- 
marized as  follows: — The  first  model  of  a  bill  of  exchange  pre- 
served to  us.  and  whir-h  dates  from  1381.  does  not,  T  believe, 
possfss  them,  though  it  dm's  possess  the  nature  or  vocation  with 
which   merchants'  bills  U9cd  generally   to   commence,   and  which 


30  THE    NEGOTIABLE   INSTRUMENTS   LAW. 

usually  preceded  the  figures.  The  marginal  figure  at  the  head  of 
a  bill  was  probably  added  at  a  very  early  dale,  in  order  that  the 
amount  of  the  bill  might  strike  the  eye  immediately,  and  was 
in  fact  a  note,  index  or  summary  of  the  contents  of  the  bill  which 
followed." 

{h)  Kingsley  v.  Sampson,  100  111.  54. 

(r)  But  this  rule  does  not  ponnit  of  the  rejection  of  any  of  the 
printed  matter  which  by  any  reasonable  construction  may  be 
reconciled  with  the  written  part.  Miller  v.  Hannibal  &  St.  .To.  R. 
R.  Co.,  90  N.  Y.  430;  Magee  v.  Lovell,  L.  R.  9  C.  P.  107;  Joyce  v. 
Realm  Ins.  Co.  L.  R.,  7  Q.  B.  580. 

(d)  Heise  v.  Bumpass,  40  Ark.  547.  Where  the  instrument  ran 
"  On  demand,  I  prt)mise  to  pay  A.  B.,  or  bearer,  the  sum  of  fifteen 
pounds,  value  received,"  and  was  addressed  in  tlie  margin  to  one 
J.  Bell,  who  wrote  upon  it,  "Accepted,  J.  Bell,"  it  was  considered 
to  be  in  effect  the  note  of  J.  Bell,  as  it  contained  a  promise  to  pay, 
although,  in  terms,  it  was  an  acceptance.  Block  v.  Bell,  1  M.  & 
R.  149.  Where  the  instrument  was  in  the  following  form :  "  Lon- 
don, August  5,  1833.  Three  months  after  date  I  promise  to  pay 
Mr.  John  Bury  or  order  forty-four  pounds,  eleven  shillings,  and 
five  pence,  value  received,  John  Bury,"  and  was  addressed  in  the 
lower  left-hand  corner  "  J.  B.  Grutherot,  35  Montague  Place,  Bed- 
ford Place,"  and  Grutherot's  name  was  written  across  the  face  as 
an  acceptance,  and  Bury's  name  across  the  back  as  an  indorse- 
ment, it  was  held  that  Buiy  might  be  held  either  as  the  drawer 
of  the  bill  against  Grutherot,  or  as  the  maker  of  the  note,  and 
therefore  was  bound  without  notice  of  dishonor.  Edis  v.  Bury, 
6  Barn.  &  Ores.  433.  In  another  case  the  instrument  ran :  "  Two 
months  after  date  I  promise  to  pay  A.  B.  or  order  ninety-nine 
pounds,  II.  Oliver,"  and  was  addressed  to  J.  E.  Oliver  and  ac- 
cepted by  him.  The  court  said :  "  It  is  not  unjust  to  presume 
that  it  was  drawn  in  this  form  for  the  purpose  of  suing  upon 
it  either  as  a  promissory  note  or  as  a  bill  of  exchange."  Lloyd  v. 
Oliver,  18  Q.  B.  471. 

(e)  For  example,  if  a  person  should  write  his  name  across  the 
face  of  a  note,  he  would,  under  this  provision,  be  deemed  an  in- 
dorser.  There  are  some  decisions  which  hold  that  in  such  case  he 
would  be  deemed  a  joint  maker.  It  is,  perhaps,  not  very  impor- 
tant which  view  is  adopted,  so  that  the  rule  upon  the  subject 
is  fixed  and  certain.  Throughout  the  act  it  has  been  the  policy  to 
make  all  irregular  parties  indorsers.     See  section  114.     In  Ger- 


FORM    AND    INTERPRETATION.  3 1 

mania  Xat.  Bank  v.  Mariner,  129  Wis.  544,  "A  note  read :  "  Four 
mouths  after  date  the  Northwestern  Straw  Works  promise  to 
pay,'  etc.,  and  was  signed  '  The  Northwestern  Straw  Works,  E.  R. 
Stillman,  Treas. ;  John  W.  Mariner.'  "  Mariner  was  the  secretary 
of  the  corporation,  duly  authorized  to  sign  the  note  on  its  behalf: — 
Held,  that  the  signature  of  Mariner  was  not  so  placed  on  the  in- 
strument ag  to  make  it  doubtful  in  what  capacity  he  intended  to 
sign,  within  the  meaning  of  this  section.  The  Court  said :  "  This 
provision,  by  its  very  terms,  applies  only  to  a  case  of  doubt  aris- 
ing out  of  the  location  of  the  signature  upon  the  instrument. 
Names  are  sometimes  placed  at  the  side,  on  the  end,  or  across  the 
face  of  the  instrument,  and  thus  a  doubt  arises  as  to  whether  the 
signer  intended  to  be  bound  as  a  maker  or  indorser,  or  perhaps 
as  a  guarantor,  and  to  solve  these  doubts  the  section  in  question, 
was  evidently  framed.  It  was  to  settle  a  doubt  fairly  arising 
from  the  ambiguous  location  of  the  name,  and  applies  to  no 
other.  In  the  present  case  there  is  no  doubt  of  this  nature.  The 
signature  of  Mr.  Mariner  is  placed  in  the  usual  and  proper,  in 
fact  the  only  proper,  place  for  a  maker.  The  doubt  arising  is 
not  a  doubt  whether  he  intended  to  sign  as  maker,  in- 
dorser, or  guarantor,  for  it  is  clear  from  the  location  of  the  name 
that  he  did  not  intend  to  sign  as  indorser  or  guarantor,  but 
simply  a  doubt  whether  he  intended  to  sign  in  an  individual  or 
in  a  representative  capacity  as  maker.  To  say  that,  where  it 
conclusively  appears  from  the  instrument  that  the  signer  intended 
to  sign  as  a  maker,  the  statute  is  intended  to  make  him  an  in- 
dorser, would  be  little  short  of  ridiculous.  The  statute  was  passed 
to  meet  a  case  where  it  is  doubtful  from  the  instrument  whether 
a  man  intended  to  become  an  indorser,  not  to  make  an  indorser 
out  of  a  person  who,  without  doubt,  intended  to  sign  as  a  maker, 
either  individually  or  as  representative  of  another.  We  have  no 
doubt,  therefore,  that  this  section  has  no  application  to  the  present 
case."  Where  two  officers  of  a  corporati(»n  indorsed  on  the  com- 
pany's demand  note  the  following  words:  "For  value  received, 
we  hereby  guarantee  the  proini)t  payment  of  this  note,"  and  fol- 
lowed the  words  with  their  signatures,  they  were  held  liable  as 
sureties,  itmi  not,  as  guarantors  of  the  instrument.  Iron  City 
National   I'.ank  v.  Rafferty,  207  Pa.  St.  2:58. 

(f)  Monson  V.  Drakclcy,  40  Conn.  H.'iO;  Solomon  v.  Hopkins,  61 
Conn.  47;  Dart  v.  Sherwood,  7  Wis.  523. 


3J  lllH    NKGOIIABLE    INSTKU  iMENTS    LAW. 

§  37.  Liability  of  person  signing  in  trade  or  assumed 
name, —  Ao  person  is  liable  on  the  instrument  whose  signa- 
ture does  not  appear  thereon  ((/),  except  as  lierein  other- 
wise expressly  pro\icled.  lUit  one  who  signs  in  a  trade  or 
assumed  name  will  be  liable  to  the  same  extent  as  if  he  had 
signed  in  his  own  name  {b). 

(a)  Persons  dealing  with  negotiable  instruments  are  presumed 
to  take  them  on  the  credit  of  the  parties  whose  names  appear  upon 
them,  and  a  person  not  a  party  cannot  be  charged  upon  proof  that 
the  ostensible  party  signed  or  indorsed  as  his  agent.  Manufac- 
turers', Etc.,  Bank  v.  Love,  13  App.  Div.  (N.  Y.)  5G1;  Briggs  v. 
Partridge,  64  N.  Y.  363.  Under  this  section,  a  firm  upon  whom  a 
draft  is  drawn  by  its  commercial  traveller  is  not  liable  thereon 
before  acceptance  by  reason  of  any  custom  in  previous  years  to 
honor  such  drafts.     Seattle  Shoe  Co.  v.  Packard,  43  Wash.  527. 

(b)  A  person  may  become  a  party  to  a  bill  or  note  by  any  mark 
or  designation  he  chooses  to  adopt,  provided  it  be  used  as  a  sub- 
stitute for  his  name  and  he  intends  to  be  bound  by  it.  De  Witt  v. 
Walton,  9  N.  Y.  574:  Brown  v,  Butchers'  &  Drovers'  Bank,  6 
Hill,  443. 

§  38.  Signature  by  agent ;  authority ;  how  shown. —  The 
signature  of  any  party  may  be  made  by  a  duly  authorized 
agent.  No  particular  form  of  appointment  is  necessary  for 
this  purpose:  and  the  authority  of  the  agent  may  be  estab- 
lished as  in  other  cases  of  agency. 

§  39,  Liability  of  person  signing  as  agent,  etc. —  Where 
the  instrument  contains  or  a  person  adds  to  his  signature 
words  indicating  that  he  signs  for  or  on  behalf  of  a  prin- 
cipal, or  in  a  represenative  capacity,  he  is  not  liable  on  the 
mstrument  if  he  was  duly  authorized  (a)  ;  but  the  mere 
addition  of  words  describing  him  as  an  agent,  or  as  filling  a 
representative  character,  without  disclosing  his  principal, 
does  not  exempt  him  from  personal  liability  (b). 

(a)  In  the  original  draft  submitted  to  the  Conference  of  Com- 
missioners on  Uniformity  of  Laws  this  section  read  as  follows: 


FORM    AXD    INTERPRETATION.  33 

"  Where  a  person  adds  to  his  signature  words  indicating  that  he 
signs  for  or  on  behalf  of  a  principal,  or  in  a  representative  ca- 
pacity, he  is  not  liable  on  the  instrument;  but  the  mere  addition 
of  words  describing  him  as  an  agent,  or  as  filling  a  representative 
character,  does  not  exempt  him  from  personal  liability.  In  de- 
termining whether  a  signature  is  that  of  the  principal  or  of  the 
agent  by  whose  hand  it  is  written,  that  construction  is  to  be 
adopted  which  is  most  favorable  to  the  validity  of  the  instrument." 
This  is  the  English  rule,  and  was  the  rule  in  New  York  prior  to 
the  statute.  Under  that  rule  a  person  signing  for  or  on  behalf 
of  a  principal  was  not  liable  on  the  instrument,  notwithstanding 
he  had  no  authority  to  bind  his  principal.  There  was  an  implied 
warranty  on  his  part  that  he  possessed  such  authority,  and  if  he 
did  not,  he  became  liable  upon  such  warranty  for  the  damages  re- 
sulting from  the  breach.  Miller  v.  Reynolds,  92  Hun,  400.  But 
no  action  could  be  maintained  against  him  on  the  instrtunent, 
when  by  its  terms  it  did  not  purport  to  bind  him.  And  his  lia- 
bility upon  the  implied  warranty  did  not  accompany  the  transfer 
of  the  instrument,  unless  the  claim  founded  upon  the  warranty 
was  also  assigned  to  the  person  to  whom  the  instrument  was 
transferred.  (./<:/.)  The  effect  of  the  section,  as  it  now  stands, 
is,  probably,  to  permit  the  holder  to  sae  the  agent  on  the  instru- 
ment, if  he  was  not  duly  authorized  to  sign  the  same  on  behalf 
of  the  principal. 

{h)  Thus,  he  is  not  relieved  from  liability  by  adding  the  de- 
scriptive term  "  trustee,"  Bank  v.  Looney,  99  Tenu.  278,  or 
"administrator,"  or  "guardian,"  Emm  v.  Carroll,  1  Yerger,  144; 
^fcWherter  v.  Jackson,  10  Humphrey,  208;  Carter  v.  Wolf,  1 
Heisk,  674,  or  "agent,"  Sumwalt  v.  Rigeley,  20  Md.  107,  or 
"secretary,"  Daniel  v.  Glidden,  38  Wash.  556.  Where  a  nego- 
tiable promissory  note  has  been  given  for  the  payment  of  a  debt 
contracted  by  a  corporation,  and  the  language  of  the  promise 
does  not  disclose  the  corporate  obligation,  and  the  signatures  to 
the  paper  are  in  the  names  of  individuals,  a  holder,  taking  hona 
fide  and  without  notice  of  the  circumstances  of  its  making,  is 
entitled  to  hold  the  note  as  the  personal  undertaking  of  its 
signers,  notwithstanding  they  affix  to  their  names  the  title  of  an 
office.  Such  an  affix  will  V)e  regarded  as  descriptive  of  the  per- 
sons, and  not  of  the  character  of  the  liability.  Unless  llic  promise 
7)urports  to  be  by  the  corporation,  it  is  that  of  the  persons  who 
subscribe  to  it;  and  the  fact  of  adding  to  their  names  an  abbre- 

3 


;vf  "•  • 

34  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

ff 

viatiou   of  some  official   title  has  no  legal  sijiiiification   as  quali- 
fying their  obligation,  and  imposes  no  obligalion  upon  the  corpo- 
ration whose  officers  they  may  be.     This  rule  is  founded  t)n   the 
general  principle  that  in  a  contract  every  material  thing  must  be 
detinitely  expressed  and  not  left  to  conjecture.     Unless  the  lan- 
guage creates,  or  fairly  implies,  the  undertaking  of  the  corpora- 
tion, or  if  the  purpose  is  ecjuivocal,  the  obligation  i:^  that  of  its 
apparent  makers.     Casco  National  Bank  v.  Clark,  13'J  N.  Y.  307, 
310;  First  Nat.  Bank  v.  Wallis,  150  N.  Y.  455.     In  Megowan  v. 
Peterson,  173  N.  Y.  1,  it  was  held  that  a  trustee  of  an  insolvent 
firm,  for  the  benefit  of  creditors  thereof,  appointed  by  such  firm 
and  its  creditors,  is  not  personally  liable  under  this  section,  upon 
a  note  signed  by  him  as  "trustee,"  but  without  disclosing  his  rep- 
resentative capacity  upon  the  face  of  the  note,  where  the  payee 
is  one  of  such  creditors  and  the  consideration  for  which  the  note 
Avas  given  was  property  purchased  from  the  payee  for  the  benefit 
of  the  trust  estate.     The  Court,  speaking  of  this  provision  of  the 
statute,  said :    "  We  do  not  understand  that  the  statute  to  which 
we  have  alluded  was  designed  to  change  the  common-law  rule  in 
this  regard,  which  is  to  the  effect  that,  as  between  the  original 
parties  and  those  having  notice  of  the  facts  relied  upon  as  con- 
stituting a  defense,  the  consideration  and  the  conditions  under 
which  the  note  was  delivered  may  be  shown."     See  also  Kerby  v. 
Ruegamer,  107  App.  Div.    (N.  Y.)   491;   Crandall  v.  Kollins,  83 
Id.  618. 

§  40.  Signature  by  procuration ;  effect  of. —  A  signature 

by  "  procuration  "  operates  as  notice  that  the  agent  has  but 
a  limited  authority  to  sign,  and  the  principal  is  bound  only 
in  case  the  agent  in  so  signing  acted  within  the  actual 
limits  of  his  authority  (a). 

ia)  The  words  "per  procuration"  have  a  special  technical  sig- 
nificance. They  are  an  express  intimation  of  a  special  and  limited 
authority;  and  a  person  taking  a  bill  so  drawn,  accepted,  or 
indorsed,  is  bound  to  inquire  into  the  extent  of  the  authority. 
Byles  on  Bills,  33.  But  an  indorsement  by  an  agent  "  per  pro  " 
which  is  within  the  powers  conferred  upon  him  is  binding  \ipon 
his  principal  aa  against  hona  fide  holders  for  value,  though  the 
agent   abused   his   authority.     Bryant   v.   La  Banque   du   Peuple 


j^V^'^C  "   V 


/•>  .'/I 


FORM    AND    INTERPRETATION.  35 

[1893],  App.  Cases,  170.    The  term  is  seldom,  if  ever,  used  in  this 
countrj'. 

§  41.  Effect  of  indorsement  by  infant  or  corporation. — 
The  indorsement  or  assignment  of  the  instrument  by  a  cor- 
poration or  by  an  infant  passes  the  property  therein,  not- 
withstanding that  from  want  of  capacity  the  corporation  (a) 
or  infant  {b)   may  incur  no  habihty  thereon,^ 

(a)  Thus,  if  a  note  should  be  drawn  payable  to  the  order  of  a 
corporation,  and  the  corporation  should  indorse  the  same  without 
consideration,  such  indorsement  would  pass  the  title  to  a  subse- 
quent holder  with  notice  of  the  facts,  though  the  corporation 
would  not  be  liable  to  him  as  an  indorser.     See  note  to  section  55. 

(fe)  The  statute  changes  the  law.  See  Roach  v.  Woodhall,  91 
Tenn.  206.  The  change,  like  others,  was  made  to  facilitate  the 
ready  and  safe  transfer  of  commercial  i)aper. 

§  42.  Forged  signature ;  effect  of. —  Where  a  signature 
is  forged  or  made  without  authority  of  the  person  whose 
signattire  it  purports  to  be,  it  is  wholly  inoperative,  and  no 
right  to  retain  the  instrument,  or  to  give  a  discharge  there- 
for, or  to  enforce  payment  thereof  against  any  party  thereto, 
can  be  acquired  through  or  under  such  signature  (a),  unless 
the  party,  against  whom  it  is  sought  to  enforce  such  right, 
is  precluded  from  setting  up  the  forgery  or  want  of  au- 
thority (b). 

(a)  Buckley  v.  Second  Nat.  Bank  of  Jersey  City,  35  N.  J.  Law, 
400;  Whiteford  v.  Munroe,  17  Md.  135.  But  it  does  not  follow 
from  this  provision  that  proof  of  one  forged  signature  on  a  note 
must  of  nf'cessity,  and  in  all  cases,  bo  given  eflFect  to  avoid  the 
note  in  favor  of  those  whose  signatures  thereto  are  found  to  be 
genuine.  It  is  the  forged  or  niumtlinrized  signntnrc  tlint  is 
declared  to  be  ino])erative;  ami  the  inliibitory  eliiuse  forbids  re- 
covery on  the  instrument  as  against  any  party  where  the  right  of 
reeovery  is  predicated  on  sueli  ino])erative  sigjinture.  Beem  i», 
Farrell   (Iowa).  11.".  N.  W.  Rep.  509.     The  agent  of  the  plaintiff 


n 


30  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

who  had  power  of  attorney  to  receive  and  indorse  checks  far 
the  plaintitf  and  to  deposit  them  in  certain  banivs,  indorsed  them 
witli  tliu  name  of  tlie  phiintitf,  to  whom  they  were  payable,  addiuj;- 
his  own  indorsement,  anil  transferred  them  to  certain  stock- 
brokers with  whom  he  was  speculating,  as  margins  on  his  per- 
sonal transactions,  the  brokers  having  knowledge  of  the  agency: — 
Held,  that  the  unauthorized  diversion  of  the  checks  by  the  agent, 
after  indorsement,  did  not  make  the  original  indorsement  of 
the  plaintitf's  name  a  forgery  under  this  section.  Salen  v.  Bank 
of  State  of  New  York,  110  App.  Div.  (N.  Y.)  636.  P,  by  fraud- 
ulently representing  himgelf  to  be  H,  obtained  a  check  from  T, 
payable  to  the  order  of  II.  At  the  time,  T  knew  of  the  existence 
of  IL  and  delivered  the  check  to  P  supposing  that  he  was  H.  P 
indorsed  H's  name  on  the  check,  and  gave  it  to  D,  who  collected 
the  money  thereon  from  the  bank,  which  charged  the  same  against 
the  account  of  T : —  Held,  that  under  this  section  the  signature 
made  by  P  transferred  no  interest,  and  that  T  could  recover  the 
amount  from  the  bank.  Tolman  v.  American  National  Bank,  22 
R.  I.  462.  Stiness,  C.  J.  said :  "  We  have  referred  to  authorities 
because  the  defendant's  counsel  so  earnestly  and  ably  argued 
that  the  act  did  not  alter  the  law-merchant  that  it  seemed  proper 
to  show  that  the  law  in  this  respect,  outside  of  the  act,  is  in  a  very 
unsatisfactory  state  and  that  the  act  ig  right.  We  do  not  think 
that  the  act  does  alter  the  law  as  it  was  when,  a  few  years  ago, 
it  seems  to  have  been  switched  off  on  a  fallacy  in  some  places. 
One  of  the  advantages  of  the  act  is  in  settling  the  question. 
Waiving  the  question  of  forgery,  about  which  the  cases  we  have 
cited  differ,  the  signature  in  this  case  is  clearly  one  'made  with- 
out the  authority  of  the  person  whose  signature  it  purports  to 
be,'  and,  therefore,  it  is  'wholly  inoperative.'  This  being  so, 
the  defendant  cannot  justify  its  action  under  it,  there  being  no 
evidence  of  any  conduct  by  the  plaintiff  to  mislead  the  defendant 
and  so  to  estop  bin  jircsent  claim.  As  the  case  stood,  the  plaintiff 
had  ordered  money  paid  to  Haskell.  The  bank  had  not  so  paid 
it.  The  fact  that  the  plaintiff  had  leen  imposed  upon  did  not 
relieve  the  bank  from  its  duty  to  see  that  the  money  was  paid 
according  to  order."  But  where  the  instrument  is  intended  for 
the  person  to  whom  it  is  delivered,  his  indorsement  will  pass  a 
good  title  to  a  holder  in  due  course,  though  he  procured  the  same 
Vjy  falsely  representing  himself  to  be  another  person  of  the  same 
name.     Jamieson   v.  McFarland,   43  Wash.   153.     The  difference 


FORM    AND    INTERPRETATION.  37 

between  the  two  cases  is,  that  iu  the  former,  the  drawer  of  the 
check  or  draft  intends  it  for  a  particular  person  other  than  the 
one  to  whom  he  delivers  it;  in  the  latter  case,  the  person  to 
whom  he  delivers  it  is,  in  fact,  the  one  for  whom  he  intended  it. 
Compare  Land,  etc.  Co.  v.  Northwestern  Nat.  Bank,  196  Pa.  St. 
230. 

(&)  Where  the  transaction  is  contrary  to  good  faith  and  the 
fraud  aflfects  individual  interests  only,  ratification  is  allowed;  but 
where  the  fraud  is  of  such  a  character  as  to  involve  a  crime  the 
adjustment  of  which  is  forbidden  by  public  policy,  the  ratifica- 
tion of  the  act  from  which  it  springs  is  not  permitted.  Forgery 
does  not  admit  of  ratification.  A  forger  does  not  act  on  behalf  of, 
nor  profess  to  represent,  the  person  whose  handwriting  he  counter- 
feits; and  the  subsequent  adoption  of  the  instrument  cannot 
supply  the  authority  which  the  forger  did  not  profess  to  have. 
Henrj'  Christian  Building  and  Loan  Association  v.  Walton,  181 
Pa.  St.  201;  Lyon  v.  Phillips,  106  Pa.  St.  57.  But  cases  some- 
times arise  where  parties  are  estopped  to  dispute  the  genuineness 
of  their  signatures.  Crout  v.  DeWolf,  1  R.  I.  393.  Thus,  where  a 
customer  has  been  guilty  of  negligence  in  examining  the  ac- 
count and  vouchers  returned  to  him  by  his  bank,  he  will  not 
be  permitted  to  dispute  the  account  because  some  of  the  checks 
are  forgeries.  Leather  Manufacturers'  Nat.  Bank  v.  Morgan, 
117  U.  S.  96.  Where  one  whose  name  has  been  forged  to  a  note 
has  received  no  benefit  from  the  forgery,  and  the  forger  was  not 
his  agent  for  any  purpose,  he  is  not  bound,  as  a  matter  of  legal 
duty,  when  the  note  is  first  shown  to  him,  to  repudiate  or  disclaim 
at  once  the  genuineness  of  the  signature.  Ilis  failure  to  do  so  is 
evidence,  in  the  nature  of  an  admission,  which  may  be  considered 
as  bearing  upon  the  question  whether  he  assumed  the  signature  as 
his  own,  but  it  is  not  conclusive.  Traders'  National  Bank  v. 
Rogers,  167  Mass.  315.  As  to  what  conduct  will  amount  to  an 
estoppel,  see  Terrs-  r.  Bisscl,  26  Conn.  41.  A  married  woman,  to 
shield  her  husband,  ratified  a  signature  on  a  promissory  note  to 
a  bank,  purporting  to  be  hers  but  forger!  by  bor  husband.  At 
maturity  the  note-  was  surreiulcnd  l..  the  Inisbaml  on  his  giving 
in  renewal  a  note  similarly  forged  which  was  accepted  in  good 
faith  by  the  bank.  In  an  action  by  the  bank  on  the  first  note,  it 
was  hclfl,  that  the  substitution  and  acceptance  of  the  second 
forged  note  did  not  constitute  a  payment,  so  as  to  bar  an  action 
on  the  note  ratified  by  the  defendant.  Central  National  Bank  v. 
Copp,  184  l^fass.  328. 


38  THE   NEGOTIABLE  INSTRUMENTS   LAW. 


ARTICLE  III. 
Consideration  of  Negotiable  Instruments. 

Section  50.  Presumption  of  consideration. 

51.  What  constitutes  consideration. 

52.  What  constitutes  holder  for  value. 

53.  When  lien  on  instrument  constitutes  holder  for 

value. 

54.  Effect  of  want  of  consideration. 

55.  Liability  of  accommodation  party. 

§  50.  Presumption  of  consideration. —  Every  negotiable 
instrument  is  deemed  prima  facie  to  have  been  issued  for  a 
valuable  consideration ;  and  every  person  whose  signature 
appears  thereon  to  have  become  a  party  thereto  for 
value  (a). 

(a)  Riverside  Bank  v.  Woofniaven  June.  L.  Co.,  34  App.  Div. 
(N.  Y.)  362;  Delano  v.  Bartlott,  6  Gushing,  364;  Lines  v.  Smith,  4 
Fla.  47 ;  Flint  v.  Phipps,  16  Oregon  437.  This  is  the  rule,  though 
no  consrideration  be  expressed.  Wilson  v.  Wilson,  26  Oregon  315. 
See  section  25.  The  statute  makes  this  rule  applicable  only  to  in- 
struments which  are  negotiable.  But  by  the  law  merchant  a  bill  of 
exchange,  though  it  lacks  the  words  payable  "  to  order,"  or  to 
"  bearer,"  which  are  essential  to  negotiability  (see  sections  20, 
210),  imports  a  consideration.  Louisville  R.  R.  Co.  v.  Caldwell, 
9b  Ind.  251 ;  Cowan  v.  Hallock,  9  Colo.  576.  The  statute  has  not 
altered  this  rule.  See  section  7.  But  as  regards  the  presumption 
of  consideration  in  the  case  of  non-negotiable  notes,  the  law  of 
^NTew  York  and  of  some  of  the  other  States  has  been  changed. 
See  note  to  section  320.  As  to  the  burden  of  proof,  see  Delano  v. 
Bartlett,  6  Cushing,  364.  In  Lassas  v.  McCarty,  47  Oregon  474, 
it  was  said  that  the  presumption  of  the  statute  that  a  promissory 
note  was  given  for  a  suflBcient  consideration  is  of  much  impor- 
tance in  business  transactions,  and   should  not  be  lightly  disre- 


CONSIDERATION    OF    NEGOTIABLE   INSTRUMENTS.  39 

garded,  in  favor  of  those  who  have  carelessly,  or  by  being  unduly 
confiding,  set  afloat  commercial  paper.  The  production  of  the 
paper  establishes  prima  facie  that  there  was  a  consideration. 
Dawson  v.  Wombles,  123  Mo.  App.  340;  Bank  of  Monticello  v. 
Dooly,  113  Wis.  590,  593;  Hickok  v.  Bunting,  92  App.  Div. 
(N.  Y.)  167.  But  when  this  presumption  is  met  by  proof  tend- 
ing to  rebut  it,  then,  on  the  question  whether  there  was  a  consid- 
eration, the  burden  of  proof  is  on  the  holder  throughout  the  trial. 
Lombard  v.  Byrne,  194  Mass.  236,  238.  As  to  the  effect  of  a 
failure  to  deny  that  the  paper  was  given  for  value  see  Benedict  v. 
Kress,  97  App.  Div.  (N.  Y.)  65. 

§  51.  Consideration,    what    constitutes. —  Value     is     any 
consideration  sufficient  to  support  a  simple  contract   (a). 
An  antecedent  or  pre-existing  debt  constitutes  value ;  and  is , 
deemed  such  whether  the  instrument  is  payable  on  demand 
or  at  a  future  time  (&). 

(a)  See  Conover  v.  Stillwell,  34  N.  J.  Law,  54 ;  Eaton  v.  Libbey, 
165  Mass.  218;  Whitney  v.  Claiy,  145  Mass.  156;  Shawmut  Nat. 
Bank  v.  Manson,  168  Mass.  425 ;  Kaymond  v.  Sellick,  10  Conn.  480. 
Lender  this  provision,  a  bank  discounting  a  note  and  obtaining 
credit  in  favor  of  the  indorser  in  a  solvent  bank  for  the  amount 
(pf  tlie  di.scountod  paper  is  a  holder  for  value.  Elgin  City 
Banking  Co.  v.  Hall  (Tenn.),  108  S.  W.  Rep.  1068. 

(h)  For  cases  applying  the  statut^gee  Singer  Manufacturing 
Co.  V.  Summers,  143  N.  C.  102;^lius  v.  Kauflfman,  104  App. 
Div.  (N.  Y.)  442;  Commercial  Nat.  Bank  v.  Citizens'  State  Bank, 
132  Iowa,  '706.  The  general  rule  is  that  whore  a  conveyance  is 
made  or  security  taken,  the  consideration  of  which  is  an  ante- 
cedent debt,  the  grantee  or  the  person  taking  the  security  is  not 
regarded  as  a  purchaser  for  a  valuable  consrideration.  People's 
Savings  Bank  r.  Bates.  120  TJ.  S.  556,  565;  Weaver  v.  Bordon,  49 
N.  Y.  28(1;  Cary  r.  White.  52  N.  Y.  138;  Wood  v.  Bobinson,  22 
N.  Y.  567;  Mingus  v.  Condit,  23  N.  J.  E<i.  313.  But  in  the  Su- 
preme Court  of  the  United  States,  and  in  many  of  the  State 
courts,  a  distinction  has  bron  made  in  favor  of  comjnercial  paper, 
and  the  rule  adopted  that  a  hono  file  liolder  taking  a  negotiable 
instrntnrnt  in  payment  of,  or  as  security  for,  an  antecedent  debt, 
is    a    lioldfT    for    a    valuable    consideration    entitled    to    protection 


40  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

against  all  the  tniuitieg  between  the  antecedent  parties.  Ivailroad 
Company  v.  iS'ational  liank,  102  U.  S.  1-i;  Swift  i'.  Tyson,  10  Pet. 
1;  National  llevere  Bank  v.  Morse,  163  Mass.  381;  Ivockville  Nat. 
Bank  v.  Citizens'  Gas  Light  Co.,  72  Conn.  570;  Koberts  v.  Hall, 
37  Conn.  205;  Bridgeport  City  Bank  v.  Welch,  29  Conn.  475; 
Harrold  v.  Kays,  64  Mich.  439;  Fitzgerald  v.  Booker,  96  Mo.  661; 
Spencer  v.  Sloan,  108  Ind.  183;  Quinn  v.  Hoord,  43  Vt.  375; 
Armour  v.  McMichael,  36  N.  J.  Law,  92;  Fisher  v.  Fisher,  98 
Mass.  303;  Roberts  v.  Hall,  37  Conn.  205;  Giovanovich  v.  Citizens' 
Bank,  26  La.  Ann.  15;  Maitland  v.  Citizens'  Nat.  Bank,  40  Md. 
540;  Robins  i'.  Lair,  31  Iowa  9;  Hotchkiss  v.  Fitzgerald  Patent 
etc.  Co.,  41  W.  Va.  357;  Fair  v.  Howard,  6  Ncv.  304;  Levy  v. 
Ford,  41  La.  Ann.  873.  In  the  case  of  Railroad  Company  v. 
National  Bank,  supra,  the  subject  was  exhaustively  examined  by 
the  Supreme  Court  of  the  United  States,  and  the  rule  laid  down 
that  the  transfer  before  maturity  of  negotiable  paper  as  security 
for  an  antecedent  debt  merely,  without  other  circumstances,  if 
the  paper  be  so  indorsed  that  the  holder  becomes  a  party  to  the 
instrument,  although  the  contract  is  without  express  agreement 
by  the  creditor  for  an  indulgence,  is  not  an  improper  use  of  such 
paper,  and  is  as  much  in  the  usual  course  of  business  as  its 
transfer  in  payment  of  such  debt;  and  that  in  either  case  the 
bona  fide  holder  is  unaflFected  by  equities  or  defenses  between  prior 
parties  of  which  he  had  no  notice.  This  exception  to  the  general 
rule  is  based  upon  considerations  of  commercial  policy,  and  is 
peculiar  to  commercial  paper.i  Prior  to  the  adoption  of  the  stat- 
ute, it  was  well  settled  in  New  York  and  several  other  states  that 
one  who  acquired  commercial  paper  as  collateral  security  for  a 
pre-existing  debt  was  not  a  holder  for  value.  Comstock  v.  Ilier, 
73  N.  Y.  269;  McBride  v.  Farmers'  Bank,  26  N.  Y.  450;  Codding- 
ton  V.  Bay,  20  Johns.  637;  Schaeffer  v.  Fowler,  111  Pa.  St.  451; 
Martin  v.  Bank,  94  Tenn.  176;  Roach  v.  Wodall,  91  Tenn.  200; 
Jenkins  v.  Schnaub,  14  Wis.  1 ;  Brooks  v.  Sullivan,  129  N.  C 
190.  This  rule  produced  many  subtle  refinements,  and  it  would 
be  imiKJssible  to  reconcile  all  the  decisions  on  the  subject.  For 
the  former  law  in  the  case  of  accommodation  paper  pledged  as 
security  see  Stephen  v.  Monongaliela  National  Bank,  88  Pa.  St. 
157;  National  Union  Bank  i'.  Todd,  132  Pa.  St.  312.  A  mere 
conditional  credit  which  may  or  may  not  become  absolute,  is  not 
value  within  the  meaning  of  the  statute.  Commercial  Nat.  Bank 
V.  Citizens'  State  Bank,  132  Iowa,  706. 


CONSIDERATION    OF    NEGOTIABLE    INSTRUMENTS.  4I 

§  52.  What  constitutes  holder  for  value. — Where  value 
has  at  any  time  been  given  for  the  instrument,  the  holder  is 
deemed  a  holder  for  value  in  respect  to  all  parties  who  be- 
came such  prior  to  that  time  (a). 

(a)  If  a  party  become  a  bona  fide  holder  for  value  of  a  bill  be- 
fore acceptance,  it  is  not  essential  to  his  right  to  enforce  it  against 
a  subsequent  acceptor  that  an  additional  consideration  should  pro- 
ceed from  him  to  the  drawee.  The  bill  itself  implies  a  representa- 
tion by  the  drawer  that  the  drawee  is  already  in  receipt  of  funds 
to  pay,  and  his  contract  is  that  the  drawee  shall  accept  and  pay 
according  to  the  terms  of  the  draft.  The  drawee  can,  of  course, 
upon  presentment  refuse  to  accept,  and  in  that  event  the  only 
recourse  of  the  holder  is  against  the  prior  parties  thereto;  but  in 
case  the  drawee  does  accept  the  bill,  he  becomes  primarily 
liable  for  its  payment,  not  only  to  the  indorsees,  but  also  to  the 
drawer  himself.     Ileuertematte  v.  Morris,  101  N.  Y.  70. 

§  53-  When  lien  on  instrument  constitutes  holder  for 
value. —  Where  the  holder  has  a  lien  on  the  instrument, 
(a),  arising  either  from  contract  or  by  implication  of  law, 
he  is  deemed  a  holder  for  value  (b),  to  the  extent  of  his 
lien  (c). 

(a)  In  the  previous  editions  of  this  work  the  author  expressed 
the  opinion  that  under  the  statute  a  person  who  tiikcg  a  negoti- 
able instrument  as  collateral  security  for  an  antecedent  debt  is  a 
holder  for  value.  And  this  is  the  view  lakoii  by  the  Supreme 
Court  of  North  Carolina.  Brooks  v.  Sullivan,  129  N.  C.  190.  In 
the  case  cited  the  court  said :  "  The  only  question  is  whether, 
when  a  negotiable  note  is  transferred  before  maturity  as  collateral 
gecurity  for  a  pre-e.xisting  debt,  the  assignee  is  such  holder  for 
value,  that  ho  takes  free  from  equities  of  which  he  had  no  notice. 
The  Negotiable  Instrument  Statute,  Acts,  18S9.  Chap.  733,  sees. 
25-27,  settles  that  such  is  the  case  now  to  the  extent  of  the  debt 
pocured.  but  that  is  a  change  of  the  law,  which  was  previously 
ofhorwisf."  And  the  same  construction  was  adopted  by  Judge 
Werner,  now  of  the  New  York  Court  of  Appeals,  in  Brewster  v. 
Sbrader,  2fi  Misc.  (N.  Y.)  480.  In  tlml  <ii<r  this  able  ju<lge 
said:     "The  language  of  tliis  section,  when  given  its  usual  and 


42  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

ordinary  sitniitication,  ouj-lit  to  leave  no  room  lor  doubt  upon  the 
subject.     Theiv  is,   however,   sueh   a   universal   di^'position   among 
lawyers  to  look  for  some  hidden  or  subtle  nieaninf^-  in   the  most 
simple  laufjuajre,  that  it  has  become  quite  the  fashion  to  require 
the  courts  to  construe  statutes,  which,  to  the  average  lay  mind, 
seena  to  require  no  construction.     If  the  language  of  the  section 
under   consideration   were   not    obviously   clear   and    unequivocal, 
and  there  were  need  of  ascertaining  the  legislative  intent  in  order 
to  give  proper  effect  to  such  language,  the  history  of  the  subject, 
of  the  judicial  decisions  in  England  and  the  states  of  this  country, 
and  of  the  proceedings  of  the  commission  on  uniformity  of  laws, 
leave  no  possible  doubt  as  to  the  purpose  of  this  section."     And 
after  reviewing  the  history  of  the  statute  the  learned  judge  con- 
tinued:    "It  seems  evident,  therefore,   from  the  history  of  this 
subject,  as  well  as  from  the  obvious  purpose  for  which  this  stat- 
ute was  enacted,  .no  less  than  from  the  language  of  the  statute 
itself,  that  the  New  York  rule,  so  called,  has  been  modified  so  as 
to  conform  to  the  rule  in  England  and  in  our  federal  court  of  last 
resort."     But  the   Appellate   Divisions   in   the  Eirst   and   Second 
Departments  have  been  disposed  to  hold  otherwise.     Sutherland 
V.  Mead,  80  App.   Div.  103;  Roseman  v.  Mahony,  86  App.  Div. 
377 ;  Bank  of  America  v.  Waydell,  103  App.  Div.  25,  33.    In  these 
last-mentioned  cases  no  reference  was  made  to  section  fifty-three, 
and  probably  this  section  was  not  called  to  the  attention  of  the 
court.      When    its    provisions    are    considered    together   with    the 
provisions  of  section  fifty-one  the  intent  seems  to  be  clear.     The 
holder,    who    has    taken    the    paper    as    collateral    security,    very 
plainly  has  a  lien  upon  it,  and,  therefore,  is  within  the  terms  of 
section  fifty-three.     The  only  question  then  is,  whether  he  must 
be  excluded  from  the  operation  of  this  section  merely  because  his 
lien   was   acquired   for   an   antecedent   indebtedness.     But   as  the 
statute  in  another   place  expressly  declares  that  "an  antecedent 
or  pre-existing  debt  constitutes  value  "  (sec.  51)  there  is  no  war- 
rant for  reading  any  such  exception  into  the  section. 
^       (h)   Continental  Nat.  Bank  v.  Bell,  125  N.  Y.  38,  42;  Rogers  v. 
Squires,  98  N.  Y.  49;  Roach  v.  Woodall,  91  Tenn.  206.     Thus  a 
bank,  having  in  its  possession  negotiable  securities  of  its  customer, 
would  be,  by  virtue  of  its  general  lien,  a  holder  for  value  to  the 
extent  of  the  balance  due  from  such  customer.     So,  any  person 
to  whom  negotiable  securities  are  pledged  as  collateral  would  be 
deemed  a  holder  for  value  to  the  extent  of  the  amount  due  to 


4 


CONSIDERATION    OF    NEGOTIABLE   INSTRUMENTS.  43 

him.  But  if  such  securities  should  be  sold  to  pay  such  balance 
or  debt,  the  purchaser,  if  a  holder  in  due  course  within  section 
91,  though  he  should  pay  less  than  their  face  value  for  them, 
could  enforce  them  for  the  full  amount  thereof.  See  section  96. 
(c)  Under  sections  53  and  90  a  person  who  holds  a  note  or 
bill  as  coUateral  security  may  sue  thereon.  Mersick  v.  Alderman, 
77  Conn.  634.  Ordinarily  he  is  entitled  to  recover  the  full  amount 
due  on  the  instrument,  with  liability  to  account  for  the  surplus 
to  the  pledgor.  Camden  Nat.  Bank  r.  Fries-Breglin  Co.,  214  Pa. 
St.  395.  But  if  the  pledgor  could  not  recover  upon  the  instru- 
ment, then  the  extent  of  the  recovery  will  be  limited  to  the  amount 
of  the  debt  due  to  the  pledgee.  Stoddard  v.  Kimball,  6  Cushing, 
469 ;  Fisher  v.  Fisher,  98  Mass.  303 ;  Chicopee  Bank  v.  Chapin, 
8  Mete.  40. 

§  54.  Effect  of  want  of  consideration. —  Absence  or 
failure  of  consideration  is  matter  of  defense  "as  against  any 
person  not  a  holder  in  due  course  (a)  ;  and  partial  failure 
of  consideration  is  a  defense  pro  tanfo  (b),  whether  the 
failure  is  an  ascertained  and  liquidated  amount  or  other- 
wise (c). 

(a)  As  between  the  immediate  parties  to  a  negotiable  promissory 
note,  while  the  note  itself  is  prima  facie  evidence  of  the  considera- 
tion, the  question  of  consideration  is  always  open;  and  it  is 
competent  to  the  defendant  to  show,  by  parol,  that  there  was  no 
sufficient  consideration,  or  that  the  consideration  has  failed,  or 
that  the  paper  was  given  for  accommodation  merely.  Batterman 
V.  Dut<'her,  95  App.  Div.  (N.  Y.)  213;  Cowoe  v.  Cornell,  75  N.  Y. 
91,  9'):>\  Anthony  v.  Valentine,  130  Mass.  119;  Ingersoll  v.  ^Martin, 
58  Mil.  67;  Corlies  r.  Howe,  11  Gray,  125;  Breneman  v.  Furniss, 
90  Pa.  St.  186.  The  burdon  of  proving  the  failure  of  considera- 
tion is  on  the  party  alleging  it.  .Tonnison  1?.  Stafford,  1  Cush. 
168.  Total  failure  of  consideration  does  not  impose  upoTi  an  inno- 
cent holder  the  burden  of  proving  that  he  gave  value  for  the  paper. 
Wilson  V.  Lazier,  11  Oratt.  477;  Albrccht  v.  Atrimpler,  7  Pa.  St. 
476.  The  failure  of  consideration  does  not  affect  the  negotiability 
of  the  instrument.  Dingman  v.  Amsink,  77  Pa.  St.  114.  Tho 
right  to  interpose  the  defense  of  want  of  consideration  is  governed 
by   the    lex   loci.     Ilerdic   v.   Rocssler.   109   N.   Y.    127,   133,   134. 


44  THE    NEGOTIABLli:   INSTRUMENTS    LAW. 

Upon  an  oxt'hang:c  of  promissory  notes,  eac-h  nolo  is  a  valid  con- 
sideratiou  tor  the  other,  and  is  fully  available  in  the  hands  of  the 
bolder;  and  the  faet  that  one  of  the  notes  is  not  paid  at  maturity 
does  not  sustain  a  defense  of  failure  of  consideration  in  an  action 
upon  the  other.  Rice  v.  Grange,  131  N.  Y.  149;  Woman  v. 
i>ost,  52  N.  Y.  422. 

(6)  Black  v.  Kigway,  131  Mass.  80;  Cline  v.  Miller,  8  Md.  274; 
Davis  V.  Wait,  12  Oregon  425. 

(.c)  The  rule,  both  in  this  country  and  in  England,  has  been 
tbat  whenever  the  defendant  is  entitled  to  go  into  the  question  of 
consideration  he  may  set  up  the  partial,  as  well  as  the  total,  want 
of  consideration.  Daniel  on  Negotiable  Instruments,  §  210.  But 
it  has  been  held  in  some  cases  that  the  part  alleged  to  have  failed 
must  be  distinct  and  definite,  for  only  a  total  failure  or  the  failure 
of  a  speciiic  and  ascertained  part  can  be  availed  of  by  way  of 
defense;  and  in  the  case  of  an  unliquidated  claim  the  party  muat 
resort  to  his  cross  action.  Pulsifer  v.  Hotchkiss  12  Conn.  234; 
Drew  V.  Towle,  7  Fost.  412;  Moggridge  v.  Jones,  14  East.  485; 
Trickey  v.  Larne,  0  M.  &  W.  278.  In  other  cases  it  is  held  that  the 
defendant  may  recoup  his  damages  though  they  be  unliquidated. 
Davis  V.  Wait,  12  Oregon  425;  Wyckhoff  v.  Runyon,  33  N.  J. 
Law,  107.  As  to  what  is  necessary  to  constitute  one  a  bolder  in 
due  course,  see  sections  52-56. 

§  55.  Liability  of  accommodation  party.—  An  accommo- 
dation party  is  one  who  has  signed  the  instrument  as  maker, 
drawer,  acceptor  or  indorser,  without  receiving  value  there- 
for, and  for  the  purpose  of  lending  his  name  to  some  other 
person  (a).  Such  a  person  is  liable  on  the  instruinent  to  a 
holder  for  value,  notwithstanding  such  holder  at  the  time  of 
taking  the  instrument  knew  him  to  be  only  an  accominoda- 
tion  party  (&). 

(a)  An  accommodation  note,  in  the  strict  sense,  is  a  loan  of 
the  maker's  credit,  without  instructions  as  to  the  manner  of  its 
use.  Lenheim  v.  Wilmarding,  55  Pa.  St.  73;  Bankers'  Iowa  State 
Bank  v.  Mason  Hand  Lathe  Co.,  121  Iowa,  570,  572.  He  cannot 
set  up  as  a  defense  that  it  was  given  without  consideration;  for 
this  would  defeat  the  very  purpose  for  which  it  was  made.    Car- 


CONSIDERATION    OF    NEGOTIABLE   INSTRUMENTS.  4$ 

penter  v.  National  Bank  of  the  Republic,  106  Pa.  St.  170-172. 
In  respect  to  third  persons,  the  law  considers  him  in  the  char- 
acter he  has  assumed  and  will  not  permit  him  to  allege  that 
the  paper  to  which  he  gave  his  name  was  an  imposition,  nor  to 
gainsay  its  reality  by  proof  that  it  was  a  tiction.  It  shall  be 
taken  pro  veritate  that  he  was  the  maker,  for  de  veritate  that 
was  the  very  thing  he  was  intended  to  be.  Bank  of  Montgomery 
County  V.  Walker,  9  S.  &  R.  229;  Stephen  v.  Monongahela  Na- 
tional Bank,  88  Pa.  St.  157,  162-3.  And  this  is  the  rule  though 
the  note  be  pledged  merely  as  collateral  security  for  the  debt  of 
the  payee.  Lord  v.  Ocean  Bank,  20  Pa.  St.  384.  A  mutual  ex- 
change of  notes  will  amount  to  a  sufficient  consideration,  so  that 
the  notes  will  not  be  regarded  as  accommodation  paper.  Williams  v. 
Banks,  11  Md.  198;  Rice  v.  Grange,  131  N.  Y.  149;  Woman  v. 
Frost,  52  N.  Y.  422. 

(b)  For  cases  in  which  the  provision  of  the  statute  has  been 
applied,  see  Packard  v.  Windholz,  88  App.  Div.  (N.  Y.)  365; 
Smith  V.  State  Bank,  104  N.  Y.  Supp.  750;  Black  v.  First  Nat. 
Bank  of  Westminster,  96  Md.  399;  White  v.  Savage,  48  Oregon, 
604;  Bankers'  Iowa  State  Bank  v.  Mason  Hand  Lathe  Co.,  121 
Iowa,  570.  The  statute  does  not  change  the  law  of  New  Jersey 
so  as  to  validate  the  contract  of  a  married  woman  obligating  her 
as  surety  for  her  husband  or  to  pay  the  debt  of  another  person. 
Peoples'  Nat.  Bank  v.  Schepflin,  73  N.  J.  Law,  29,  38.  In 
Massachusetts,  on  the  other  hand,  since  the  Negotiable  Instru- 
ments Act,  as  well  as  before,  if  a  married  woman  indorses  for 
accommodation  the  note  of  a  partnership  of  which  her  husband 
is  a  member  payable  to  him  and  indorsed  also  by  him,  she  is 
liable  on  her  contract  of  indorsement  to  a  bank  to  which  her 
husband  acting  for  the  partnership  negotiates  the  note.  ]\Iiddle- 
borough  National  Bank  v.  Cole,  191  Mass.  168.  An  accommo- 
dation indorscr  has  the  right  to  retract  his  indorsement  at  any 
time  before  the  paper  is  negotiated.  His  consent  to  be  indorser 
is  necessary  to  make  him  such.  ITo  cannot  be  compelled  to  in- 
dorse whether  he  will  or  no;  and  as  the  instrument  is  a  mere 
blank  piece  of  paper  until  it  passes  into  other  hands  for  valnnble 
consideration,  it  follows  that  he  has  the  same  right  to  retract 
the  indorsement  already  made  as  he  had  to  refuse  his  indorsement 
in  the  first  instance;  that  is,  his  indorsement  and  his  continuing 
to  be  80  arc  alike  voluntary  until  rights  arise  by  the  negotiation  to 
third  parties.     Berkely  v.   Tinslcy,  88  Va.  1001,  1001.     And  the 


46  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

purchaser  of  an  acooiiiiiioclatioii  note,  after  it3  maturity,  pets  no 
better  nor  greater  right  to  enforce  it  against  the  maker  or  in- 
dorser  than  if  it  were  ordinary  negotiable  paper  given  for  value. 
Cottrell   r.   Watkins,  89  Va.  801. 

Tlie  provision  of  the  statute  does  not  apply  to  corpora- 
tions, which,  as  a  general  rule,  are  without  power  to  bind 
themselves  as  accommodation  parties.  A  national  bank  has 
no  such  power.  National  Bank  of  Commerce  v.  Atkinson, 
55  Fed.  Kep.  465,  27  U.  S.  App.  88;  nor  has  a  State  bank. 
The  Bank  of  Genesee  v.  The  Patehin  Bank,  13  N.  Y.  309; 
Farmers'  &  Mechanics'  Bank  v.  Butchers'  &  Drovers'  Bank,  10 
N.  Y.  125,  128;  Morford  v.  The  Farmers'  Bank  of  Saratoga 
County,  26  Barb.  568;  nor  a  manufacturing  corporation.  The 
Central  Bank  v.  The  Empire  Stone  Dressing  Co.,  26  Barb.  23; 
The  Bridgeport  City  Bank  v.  The  Empire  Stone  Dressing  Co., 
30  Barb.  421 ;  The  Farmers'  &  Mechanics'  Bank  v.  The  Empire 
Stone  Dressing  Co.,  5  Bosw.  275;  Wahlig  v.  The  Standard  Pump 
Manufacturing  Co.,  25  N.  Y.  St.  Kep.  864;  Filon  v.  The  Miller 
Brewing  Co.,  38  N.  Y.  St.  Eep.  602;  National  Bank  of  Newport 
V.  Snyder  Manufacturing  Co.,  117  App.  Div.  (N.  Y.)  371;  Monu- 
ment National  Bank  v.  Globe  Works,  101  Mass.  57;  nor  a  rail- 
road company,  Davis  v.  Old  Colony  Railroad  Company,  131 
Mass.  258;  J.  G.  Brill  Co.  v.  Norton  &  Taunton  St.  Ry.  Co.,  189 
Mass.  431 ;  nor  a  warehousing  and  security  company.  The  Na- 
tional Park  Bank  v.  G.  A.  M.  W.  &  S.  Co.,  116  N.  Y.  281; 
nor  a  life  insurance  company,  Aetna  National  Bank  v. 
Charter  Oak  Life  Insurance  Company,  50  Conn.  167; 
nor  a  turnpike  company,  Hall  v.  Auburn  Turnpike  Co.,  27 
Cal,  256;  nor  an  oil  company,  Culver  v.  Reno  Real  Estate 
Company,  91  Penn.  St.  367.  No  corporations  organized  under 
the  statutes  of  New  Yoj-k  are  authorized  to  bind  the  prop- 
erty of  their  shareholders  by  accommodation  indorsements.  Fox 
V.  Rural  Home  Co.,  90  Hun,  365,  367.  But  where  a  corporation 
is  authorized  to  take  a  note  for  any  purpose,  the  presumption  in 
regard  to  any  note  executed  to  it  is  that  it  was  executed  for  a 
legitimate  purpose.  Howard  v.  Boonnan,  17  Wis.  459;  Lehigh 
Valley  Coal  Co.  v.  West  Depere  Agr.  Works,  63  Wis.  45.  When 
in  an  action  upon  a  promissory  note  it  is  shown  without  dispute 
that  the  defendant,  a  manufacturing  corporation,  made  a  note 
for  the  accommodation  of  the  payee,  another  corporation,  and  that 
the  notes  were  renewed  from  time  to  time  by  the  payee,  which 


CONSIDERATION    OF    NEGOTIABLE   INSTRUMENTS.  47 

always  paid  the  discount,  the  defendant  is  entitled  to  a  ruling 
that  the  paper  is  an  accommodation  paper  within  the  terms  of 
the  Negotiable  Instruments  Law,  and  it  is  error  to  submit  that 
question  to  the  jur3\  Nat.  Bank  of  Newport  v.  Snyder  Manu- 
facturing Co.,  117  App.  Div.  370.  An  indorsement  by  a  partner 
of  his  separate  accommodation  note  with  the  name  of  his  firm  is 
a  sufficient  indication  of  the  nature  of  the  transaction  to  make 
it  the  duty  of  the  bank  which  discounts  it  to  inquire  into  his 
authority  to  use  the  firm  name  for  the  occasion,  unless  there  are 
circums-tances  from  which  the  authority  can  be  implied.  Tanner 
V.  Hall,  1  Pa.  St.  417. 

The  statute  does  not  change  the  rule  that  an  acconamoda- 
tion  party  has  the  right  to  determine  for  himself  what  use 
shall  be  made  of  the  instrument  which  he  signs.  He  may 
impose  material  or  immaterial  conditions  and  terms,  and  no 
person  can  enforce  the  instrument  against  him  who  takes  it  in 
violation  of  such  terms  and  conditions  and  with  notice  thereof. 
Benjamin  v.  Rogers,  126  N.  Y.  60.  Thus,  where  the  defendant 
indorsed  a  note  upon  the  condition  that  it  should  not  be  negoti- 
ated in  New  York,  assigning  as  a  reason  that  he  did  not  wish  to 
be  sued  upon  it  in  the  State,  it  was  held  that,  while  the  restriction 
did  not  seem  "to  be  material,  yet  the  diversion  was  a  defense  to 
the  indorser  as  against  one  who  was  not  a  holder  for  value. 
United  States  Nat.  Bank  v.  Ewing,  131  N.  Y.  506.  But  see 
Kogers  v.  Sipley,  35  N.  J.  Law,  86. 


48  THE   NEGOTIABLE  INSTRUMENTS   LAW. 


ARTICLE  IV. 

Negotiation. 

Section  60.  What  constitutes  negotiation. 

61.  Indorsement;  how  made. 

62.  Indorsement  must  be  of  entire  instrument. 

63.  Kinds  of  indorsement. 

64.  Special  indorsement ;  indorsement  in  blank. 

65.  Blank  indorsement ;  how  changed  to  special  in- 

dorsement. 

66.  When  indorsement  restrictive. 

67.  Effect  of  restrictive  indorsement;  rights  of  in- 

dorsee. 

68.  Qualified  indorsement. 

69.  Conditional  indorsement. 

70.  Indorsement  of  instrument  payable  to  bearer. 

71.  Indorsement    where  payable   to    two   or   more 

persons. 
y2.  Effect  of   instrument  drawn  or  indorsed  to  a 
person  as  cashier. 

73.  Indorsement  where  name  is  misspelled,  et  cetera. 

74.  Indorsement  in  representative  capacity. 

75.  Time  of  indorsement ;  presumption. 
yd.  Place  of  indorsement ;  presumption. 
yy.  Continuation  of  negotiable  character. 

78.  Striking  out  indorsement. 

79.  Transfer  without  indorsement ;  effect  of. 

80.  When  prior  party  may  negotiate  instrument. 

§  60.  What  constitutes  negotiation. —  An  instrument  is 
negotiated  when  it  is  transferred  from  one  person  to  another 
in  such  manner  as  to  constitute  the  transferee  the  holder 
thereof.     If  payable  to  bearer  (a)   it  is  negotiated  by  de- 


/  /:r 


$  u- 


NEGOTIATION.  49 

livery;  if  payable  to  order  {h)  it  is  negotiated  by  the  in- 
dorsement (c)  of  the  holder  completed  by  delivery  {d). 

(a)  As  to  what  instruments  are  payable  to  bearer,  see  section  28. 

(6)  As  to  what  instruments  are  payable  to  order,  see  section  27. 

(c)  An  indorsement  is  usually  written  on  the  back  of  the  instru- 
ment, but  the  place  is  not  essential.  If  the  payee  write  his  name 
on  any  part  of  the  instrument,  with  the  intention  of  indorsing  it, 
that  is  a  sutBcient  indorsement.  Haines  v.  Dubois,  29  N.  J.  Law, 
259.     See  section  36,  subd.  6. 

{d)  The  indorsement  alone  without  delivery  conveys  no  title. 
Dann  v.  Norris,  24  Conn.  337;  Clark  v.  Sigourney,  17  Conn. 
520;  Middleton  v.  Griffith,  57  N.  J.  Law,  442;  Spencer  v.  Carstar- 
phen,  15  Colo.  445.  As  between  the  original  parties  and  others 
having  notice,  a  conditional  delivery,  as  well  as  want  of  considera- 
tion, may  be  shown;  and  parol  evidence  that  the  delivery  was 
conditional,  and  of  the  terms  of  the  condition,  is  not  open  to 
the  objection  of  varying  or  contradicting  the  written  contract. 
Higgins  V.  Ridgeway,  153  N.  Y.  130 ;  Persons  v.  Hawkins,  41  App. 
Div.  (N.  Y.)  171;  Simmons  v.  Thompson,  29  App.  Div.  (N.  Y.) 
559;  Hodge  v.  Smith,  130  Wis.  32G;  Ricketts  v.  Pendleton,  14 
Md.  320;  McFarland  v.  Sikes,  54  Conn.  250.  But  a  parol  agree- 
ment, although  entered  into  at  the  time  of  making  negotiable 
paper,  that  the  payee  will  not  negotiate  it  and  will  renew  it,  etc., 
is  inadmissible  to  vary  the  effect  of  the  paper.  Heist  v.  Hart. 
73  Pa.  St.  286.  So,  it  has  been  hold  that  evidence  of  an  oral 
agreement  that  pajnnent  was  not  to  be  called  for  until  certain 
paintings  of  the  maker  had  been  sold  is  an  attempt  to  vaiy  the 
written  contract.  Wooley  v.  Cobb,  165  Mass.  503.  Sec  Woods 
Son  Co.  V.  Schaefer,  173  Mass.  443.  By  former  statutes  in  some 
States,  notes  made  payable  to  a  person  named  therein  or  bearer 
mu.st  have  been  indorsed  to  pass  the  legal  title.  Garvin  v. 
WiswcU,  83  111.  218;  Blackman  v.  Lehman,  63  Ala.  547. 

§6i.  Indorsement;  how  made. —  Tlie  iiidor.sement  must 
be  written  on  the  instrument  itself  or  upon  a  paper  attached 
thereto  fa).  The  signature  of  the  indorser,  without  addi- 
tional words,  is  a  sufficient  indorsement   (b). 

(n)  Crosby  v.  Roub,  16  Wis.  616;  Folgcr  v.  Chase,  18  Pick.  63; 
French  v.  Tumor,  15  Tnd.  59.     The  rule  as  commonly  stated   is, 
4 


50  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

that  where  there  is  not  room  on  the  bill,  the  indorsement  may  be 
on  an  allonge.  But  it  is  not  necessary  that  there  should  be  a 
physieal  impossibility  of  writing  the  indorsement  on  the  instru- 
ment itself;  it  may  be  on  an  allonge,  whenever  the  necessity  or 
convenience  of  the  parties  requires  it.  See  cases  above  cited. 
Besides,  any  such  statement  of  the  rule  would  give  rise  to  a  ques- 
tion of  fact  which  might  be  determined  variously.  But  see 
Bi^^lop  V.  Chase,  150  Mo.  158;  Franklin  t'.  Twogood,  Iowa,  515; 
Peach  !'.  Bligh,  37  111.  317;  Haskell  v.  Brown,  65  111.  29;  Wall  v. 
Ilollenbeck,  19  Neb.  639. 

(&)  This  is  the  customary  and  mercantile  form  of  indorsement. 
But  an  indorsement  of  a  promissory  note  as  follows:  "For  value 
received,  I  hereby  assign,  transfer  and  set  over  to  B  all  my  right, 
title,  interest  and  claim  in  the  within  note,"  passes  a  legal  title  to 
the  same  and  does  not  destroy  its  negotiability.  Hall  v.  Toby,  110 
Pa.  St.  318 ;  Thorp  v.  Mindeman,  123  Wis.  149.  Where  the  name 
of  the  drawee  is  stamped  on  the  back  of  a  draft  with  a  rubber 
stamp,  by  one  having  authority  to  do  so  and  with  intent  to  in- 
dorse it,  it  is  a  valid  indorsement,  but  does  not  prove  itself. 
Mayers  v.  McRimmon,  140  N.  C.  640.  And  the  transferee  having 
possession  under  such  an  indorsement  is  deemed  prima  facie  a 
holder  in  due  course.     Evans  v.  Freeman,  142  N.  C.  61. 

§  62.  Indorsement  must  be  of  entire  instrument. —  The 
indorsement  must  be  an  indorsement  of  the  entire  instru- 
ment. An  indorsement,  which  purports  to  transfer  to  the 
indorsee  a  part  only  of  the  amount  payable,  or  which  pur- 
ports to  transfer  the  instrument  to  two  or  more  indorsees 
severally,  does  not  operate  as  a  negotiation  of  the  instru- 
ment (a).  But  where  the  instrument  has  been  paid  in  part, 
it  mav  be  indorsed  as  to  the  residue  (&). 

(a)  For  example,  where  a  note  for  $500  was  indorsed,  "  Pay  to 
L  four  hundred  dollars  out  of  this  note,"  it  was  held  L  could 
not  recover  from  the  maker.     Lindsay  v.  Price,  33  Tex.  282. 

(h)  The  indorsement  of  a  partial  payment  on  the  instrument 
does  not  render  it  non-negotiable.  Smith  v.  Shippey,  182  Pa.  St. 
24. 


NEGOTIATION.  5 1 

§  63.  Kinds  of  indorsement. —  An  indorsement  may  be 
either  special  or  in  blank ;  and  it  may  also  be  either  restrict- 
ive or  qualified,  or  conditional. 

§  64.  Special  indorsement ;  indorsement  in  blank. — A  t-.^^|ti-iL- 
special  indorsement  specifies  the  person  to  whom,  or  to 
whose  order  the  instrument  is  to  be  payable;  and  the 
indorsement  of  such  indorsee  is  necessary  to  the  further 
negotiation  of  the  instrument.  An  indorsement  in  blank 
specifies  no  indorsee,  and  an  instrument  so  indorsed  is  pay-**^  ■  ,  »V 
able  to  bearer,  and  may  be  negotiated  by  delivery  (a). 

(a)  See  section  28.  The  legal  effect  of  an  indorsement  in  blank 
may  not  be  varied  by  parol.     Torbert  v.  Montague,  38  Colo.  325. 


f*    en- 


/ 


^  65.  Blank  indorsement;  how  changed  to  special  indorse- 
ment.—  The  holder  may  convert  a  blank  indorsement  into 
a  special  indorsement /by  writing  over  the  signature  of  the 
indorser  in  blank \any/ contract  consistent  with  the  character 
of  the  indorsement  (a). 

(a)  Beckwith  v.  Angell,  6  Conn.  317.  Thus,  he  might  write 
over  it  a  special  indorsement  to  himself  or  to  some  other  person. 
But  he  could  not  write  over  it  a  contract  of  guaranty;  for  the 
effect  of  this  would  be  to  deprive  the  indorser  of  his  right  to  notice 
in  ease  of  non-payment.  Belden  v.  Ilann,  Gl  Iowa  42.  Such  a 
contract  would  Ix?  inconsistent  with  tlie  character  of  the  indorse- 
ment. 

§  66.  When  indorsement  restrictive. —  An  indorsement 
is  restrictive,  which  either: 

1.  Prohibits  the  further  negotiation  of  the  instrunicnl 
(a)  ;  or 

2.  Constitutes  the  indorsee  the  agent  of  the  indorser 
(6) ;  or 


\ 


52  THE    MXIOIIAHLK    INSTRUMENTS    LAW. 

3.  Vests  the  title  in  the  indorsee  in  trust  for  or  to  the 
use  of  some  other  person  (c). 

But  the  mere  absence  of  words  implying  power  to  nego- 
tiate does  not  make  an  indorsement  restrictive  (d). 

(a)  "  Pay  Bank  of  A  only  "  would  be  such  an  indorsement  as 
is  meant  here. 

{h)   The   most   frequent    instance   of    this    is    the   indorsement 
"  for  collection."     Such   indorsement  does  not  transfer  the  title 
to  the  indorsee,  but  constitutes  him  merely  an  agent  to  present 
the  paper,  and  receive  payment  thereof  for  the   account  of  the 
owner.      Commercial    National    Bank    v.    Armstrong,    148    U.    S. 
50;    National   Butchers'  and   Drovers'   Bank   v.  Hubbell,   117  N. 
Y.  384;  Armstrong  v.  National  Bank  of  Boyertown,  90  Ky.  431; 
Freeman's  Bank  v.  National  Tube  Works,  151  Mass.  413 ;  Sweeney 
V.  Easter,  1  Wail.  173;  Commercial  National  Bank  v.  Hamilton 
'National   Bank,   42   Fed.    Rep.    880;    City   Bank   of    Sherman   v. 
Weiss,  68  Tex.  332;  Central  R.  R.  Co.  v.  First  National  Bank  of 
Lynchburg,   73   Ga.   384;   Bank  of  Metropolis   v.   First  National 
Bank  of  Jersey  City,  19  Fed.  Rep.  658;  Blaine  v.  Bourne,  11  R. 
I.  119;  Cecil  Bank  v.  Farmers'  Bank,  22  Md.  148;  Northwestern 
National  Bank  v.  Bank  of  Commerce,  107  Mo.  402.    Where  an  in- 
dorsement in  blank  is  accompanied  by  a  letter  stating  that  the 
draft  is  for  "  collection  and  credit,"  the  indorsement  and  letter 
must  be  read  together,  and  the  effect  is  to  make  the  indorsement 
restrictive  and  the  same  in  character  as  if  the  contents  of  the 
letter    had    been    incorporated    in    the    indorsement.      Bank    of 
America   v.  Waydell,  187  N.  Y.  115.     As  to  the  liability  of  an 
indorser  to  whom  the  instrument  has  been  indorsed  "  for  collec- 
tion," see  note  to  section  116. 

(c)  Lloyd  V.  Sigourney,  5  Bing.  252;  3  M.  &  P.  229;  Snee  v. 
Prescott,  1  Atk.  245.  Illustration:  Pay  A  for  account  of  B.  In 
such  case  the  title  passes  to  A;  but  the  indorsement  is  restrictive 
to  the  extent  that  it  gives  notice  that  the  instrument  cannot  be 
negotiated  by  A  for  his  own  debt  or  for  his  own  benefit.  Hook 
V.  Pratt,  78  N.  Y.  371,  375. 

(d)  Thus,  if  the  instrument  is  drawn  to  the  order  of  A,  his 
indorsement  "  Pay  to  B  "  does  not  restrict  the  further  negotiation 
of  the  instrument,  though  the  words  "  or  order "  are  not  included 
in  the  indorsement.     See  Leavitt  v.  Putnam,  3  N.  Y.  494. 


NEGOTIATION.  53 

§  67.  Effect  of  restrictive  indorsement ;  rights  of  indorsee. 
—  A  restrictive  indorsement  confers  upon  the  indorsee  the 
right: 

1.  To  receive  payment  of  the  instrument; 

2.  To  bring  any  action  thereon  that  the  indorser  could 
bring   (a)  ; 

3.  To  transfer  his  rights  as  such  indorsee,  where  the 
form  of  the  indorsement  authorizes  him  to  do  so  (5). 

But  all  subsequent  indorsees  acquire  only  the  title  of  the 
first  indorsee  under  the  restrictive  indorsement. 

(a)  This  provision  of  the  statute  was  applied  in  Smith  v.  Bayer, 
46  Oregon,  143.  The  holder  of  negotiable  paper  may  sue  in  his  own 
name,  though  but  an  agent  for  others.  Ward  v.  Tyler,  52  Pa.  St.  393. 
The  statute  enables  a  bank  to  sue  in  its  own  name  on  paper  in-  ( 

dorsed  to  it  "for  collection."  As  to  whether  this  could  be  done 
before  the  statute  there  was  some  conflict  in  the  authorities.  The 
right  is  sustained  by  Wilson  v.  Tolson,  79  Ga.  137;  Cummings  v. 
Kohn,  12  Mo.  App.  585;  Wintermute  v.  Torrent,  83  Mich.  555; 
Regina  Flour  Mill  Co.  v.  Holmes,  156  Mass.  11;  Spofford  v. 
Norton,  126  Mass.  333;  Whiten  v.  Ilayden,  9  Allen,  408;  Roberts 
I'.  Parrish,  17  Oregon  583;  McDaniel  v.  Pressler,  3  Wash.  636; 
Ward  V.  Tyler,  52  Pa.  St.  393.  But  in  Rock  County  National 
Bank  v.  Hollister,  21  Minn.  385,  it  was  held  that  the  provisions 
of  the  Code  requiring  the  action  to  be  brought  in  the  name  of 
the  real  party  in  interest  would  prevent  an  indorsee  to  whom  the 
irtstrument  was  indorsed  "  for  collection "  from  maintaining 
the  action. 

(fc)  The  restrictive  indorsee  takes  the  paper  subject  to  all  equi- 
ties that  might  have  been  asserted  by  the  principal  obligor  had  it 
not  been  indorsed.     Smith  v.  Bayer,  40  Oregon.  143. 

§  68.  Qualified  indorsement.  —  A  (lualified  indorsement 
constitutes  the  indurser  a  mere  assignor  of  the  title  to 
the  instrument,  it  may  be  made  by  adding  to  the  indorser's 
signature  the  words  "  without  recourse  "  or  any  words  of 


54  I'lll^    NEGOTIABLE   INSTRUMENTS   LAW, 

similar  import  {a).  Such  an  iiulorsement  does  not  impair 
the  negotiable  character  of  the  instrument  (b). 

(a)  Grant  r.  Flomiuji-,  40  i*a.  St.  l-iO;  C-owlts  v.  Harts,  3  Conn. 
522.  But  the  words  ouiployud  must  clearly  indicate  that  the  in- 
dorser  intends  to  disclaim  liability.  Fassin  v.  Hubbard,  55  N.  Y. 
470.  Hence,  where  the  payee  wrote  above  his  signature  an  assign- 
ment  in    the  following  form,  "  I  hereby  assign  the  within  note 

to  ,''  Held: — that  this  did  not  relieve  him  from  liability  as 

indorser.  Markcy  v.  Corey.  108  Mich.  184.  The  words  "  without 
recourse "  following  the  name  of  the  first,  and  preceding  the 
name  of  a  second,  indorser  may,  as  between  them,  be  shown  by 
parol  evidence  to  apply  to  the  former  instead  of  to  the  latter. 
Corbett  v.  Fetzer,  47  Neb.  2G9.  And  this  although  the  second 
indorsee  took  it  without  knowing  that  the  limitation  was  ap- 
plicable to  the  first  indorser.  Fitchburg  Bank  v.  Greenwood,  2 
Allen,  434. 

(h)  Statute  applied,  Elgin  City  Banking  Co.  v.  Hall,  (Tenn.) 
108  S.  W.  Rep.  1068.  A  qualified  indorsement  in  no  respects 
affects  the  negotiability  of  the  instrument,  but  simply  qualifies  the 
duties,  obligations  and  responsibilities  of  the  indorser  resulting 
from  the  general  principles  of  the  law.  Stewart  v.  Preston,  1  Fla. 
10,  22.  And  whatever  interest  would  pass  by  a  general  or  full 
indorsement  will  pass  by  a  qualified  indorsement.  Stewart  v. 
Preston,  1  Fla.  10,  22:  Epler  v.  Funk,  8  Pa.  St.  468.  If  the 
indorsement  is  in  blank,  without  recourse,  any  subsequent  holder 
is  authorized  to  fill  up  the  blank  with  his  own  name  as  indorsee. 
Lyon  V.  Ewings,  17  Wig.  61.  A  qualified  indorsement  is  not  such 
a  departure  from  the  usual  course  of  business  as  to  put  the  trans- 
feree on  inquiry  as  to  the  equities  between  the  original  parties. 
Bisbing  v.  Graham,  14  Pa.  St.  14;  Lomax  v.  Picot,  2  Rand.  260. 
And  this  is  so,  though  the  words  without  recourse  are  added  to 
an  indorsement  in  the  following  form :  "  For  value  received  I 
hereby  sell,  transfer  and  assign  the  within  note."  Thorp  v. 
Mindeman,  123  Wis.  140  (a  case  arising  under  the  statute). 

§  69.  Conditional  indorsement. —  Where  an  idorsement 
is  conditional,  a  party  required  to  pay  the  instrument  may 
disregard  the  condition  and  make  payment  to  the  indorsee 
or  his  transferee,  whether  the  condition  has  been  fulfilled 


NEGOTIATION.  55 

or  not  (a).  But  any  person  to  whom  an  instrument  so 
indorsed  is  negotiated  will  hold  the  same,  or  the  proceeds 
thereof,  subject  to  the  rights  of  the  person  indorsing  condi- 
tionally (6). 

(a)  The  first  sentence  is  the  same  as  section  33  of  the  English 
Bills  of  Exchange  Act  with  a  slight  modification.  In  his  note  to 
that  section  Judge  Chalmers  says :  "  This  section  alters  the  law. 
It  was  formerly  held  that  if  a  bill  was  indorsed  conditionally,  the 
acceptor  paid  it  at  his  peril  if  the  condition  was  not  fulfilled. 
This  was  hard  on  him.  If  he  dishonored  the  bill  he  might  be 
liable  to  damages,  and  yet  it  might  be  impossible  for  him  to  find 
out  if  the  conditions  had  been  fulfilled."  See  Daniel  on  Neg. 
Inst.,  sections  697,  698a.  There  appear  to  be  no  American  cases 
upon  the  subject;  and  the  only  English  case  is  Robertson  v. 
Kensington,  4  Taunt.  30. 

(&)  The  rule  adopted  here  is  somewhat  analogous  to  that  which 
gives  to  an  indorsor  who  has  paid  a  note  in  part  an  equitable 
right  pro  tanto  in  thfe^ proceeds,  where  the  holder  afterward  col- 
lects the  whole  amount'of  the  note  from  the  maker.  See  Madison 
Square  Bank  r.  Pierce,  137  N.  Y.  444. 

§  70.  Indorsement    of    instrument    payable    to    bearer. — 
Where  an  instrument,  payable  to  bearer,  is  indorsed  speci- 
ally, it  may  nevertheless  be^further  negotiated  by  delivery 
(a)  ;  but  the  person  indorsing  specially  is  liable  as  indorser  ^ 
to  only  such  holders  as  make  title  through  his  indorsement.  ^ 

(a)  See  Johnson  v.  Mitchell,  50  Tex.  212;  Smith  v.  Clarke, 
Peake,  225;  Daniel  on  Neg.  Inst.,  sections  663ff,  696.  Whoro  a 
hill  accepted  and  indorsed  by  the  payee,  in  blank,  was  by  the  next 
hohler  indorsed  specially,  it  was  held,  that  the  first  indorsement 
being  in  blank,  the  bill  was  afterward  transferable  by  mere  de- 
livery, and  a  holdor,  by  delivery,  might  strike  out-  the  special 
indorsement  and  in  a  suit  against  the  acceptors  declare  and 
recover,  as  the  indorsee  of  the  payee.  Mitchell  v.  Fuller,  15  Pa. 
St.  268.  A  check  payable  to  a  certain  named  person,  or  bearer, 
need  not  be  indorsed,  nor  need  the  holder  thereof  be  identilicd, 
and    a    bank    paying   such   check   without   indcntification   of   tho 


56  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

holder  is  not  negligent,  though  the  bank,  in  compliance  with  its 
custom,  required  it  to  be  indorsed.  Fai-mers  &  Merchants'  Bank 
I'.  Bank  of  liutherford,  115  Tenn.  G4. 

§  71.  Indorsement  where  payable  to  two  or  more  persons. 
—  Where  an  instrtiment  is  payable  to  the  order  of  two  or 
more  payees  or  indorsees  who  are  not  partners,  all  must  in- 
dorse, tmless  the  one  indorsing  has  authority  to  indorse  for 
the  others  (a). 

(a)  Allen  v.  Corn  Exchange  Bank,  87  App.  Div.  (N.  Y.)  335. 
As  the  indorsement  of  all  the  payees  is  necessary  to  give  good 
title,  an  indorser  of  a  note  made  payable  to  several  payees  is  not 
liable  to  a  transferee  thereof  when  the  maker,  without  authority 
from  or  knowledge  of  the  indorser,  has  altered  the  note  before 
negotiation  by  striking  out  the  name  of  one  payee  and  sub- 
stituting his  own  name  as  payee  thereon.  First  National  Bank  v. 
Gridley,  112  App.  Div.  (N.  Y.)  398. 

§  72.  Effect  of  instrument  drawn  or  indorsed  to  a  person 
as  cashier. —  Where  an  instrument  is  drawn  or  indorsed  to 
a  person  as  "  cashier"  or  other  fiscal  officer  of  a  bank  or 
corporation,  it  is  deemed  prima  facie  to  be  payable  to  the 
bank  or  corporation  of  which  he  is  such  officer;  and  may  be 
negotiated  by  either  the  indorsement  of  the  bank  or  corpora- 
tion, or  the  indorsement  of  the  officer  (a). 

(a)  It  is  common  practice  for  banks  to  indorse  in  this  manner 
paper  remitted  for  collection.  The  rule  above  stated  as  to  indorse- 
ments to  cashiers  of  banks  is  supported  by  the  following  cases: 
Bank  of  the  State  v.  Muskingum  Bank,  29  N.  Y.  619 ;  First  Nat. 
Bank  v.  Hall,  44  N.  Y.  395;  Bank  of  Genesee  v.  Patchin  Bank, 
19  N.  Y.  312:  Folger  v.  Chase,  18  Pick.  63;  Farmers'  etc.,  Bank 
r.  Troy  City  Bank,  1  Dough.  (Mich.)  457;  Watervliet  Bank  v. 
White,  1  Denio,  60S:  Lookout  Bank  v.  Aull,  93  Tenn.  645.  The 
commissioners  deemed  it  wise  to  extend  the  rule  to  all  fiscal  offi- 
•  •ers  of  coiTporations.  Under  this  provision  an  indorsement  to 
the  treasurer  of  a  savings  bank  would  make  the  paper  payable 


NEGOTIATION.  57 

to  the  bank.  So,  of  an  indorsement  to  the  secretary  of  a  trust 
company.  Under  this  section,  it  is  competent  in  an  action  on  a 
certificate  of  deposit  made  payable  to  S  as  cashier  of  a  bank, 
and  indorsed  by  him  as  cashier,  to  show  that  he  was  the  cashier 
of  such  bank,  and  was  acting  in  that  capacity  in  transferring  the 
certificate  sued  on.  Johnson  r.  Buffalo  Center  State  Bank  (Iowa), 
112  N.  W.  Rep.  165.  And  it  is  not  competent  for  the  bank  to 
prove  that  S  was  making  use  of  his  official  title  and  authority 
in  his  own  individual  interest,  for  the  purpose  of  showing  that 
the  bank  was  not  bound  by  this  act.  (Id.)  The  statute  has  been 
applied  also  in  Griffin  v.  Erskine,  131  Iowa,  444,  450-451,  and  in 
First  Nat.  Bank  v.  McCullough,  (Oregon)  93  Pac.  Rep.  366. 

§  73.  Indorsement  where  name  is  misspelled,  et  cetera. — 
Where  the  name  of  a  payee  or  indorsee  is  wrongly  desig- 
nated or  misspelled,  he  may  indorse  the  instrument  as 
therein  described,  adding,  if  he  thinks  fit,  his  proper 
signature  (a). 

(a)  Thus,  one  who,  while  carrying  on  business  on  his  own  ac- 
count in  the  name  of  a  company  which  has  been  incorporated, 
but  not  organized,  receives  in  payment  of  a  debt  contracted  with 
him  in  such  business  a  promissory  note  payable  to  the  order  of 
the  corporation,  may  transfer  the  note  by  indorsing  it  in  his  own 
name.  Bryant  v.  Eastman,  7  Cush.  111.  Conversely,  a  man  will 
be  bound  by  paper  made  by  him  in  the  name  he  adopts  in  his 
business.     Salmon  v.  Hopkins,  61  Conn.  47. 

§  74.  Indorsement  in  representative  capacity. —  Where 
any  person  is  under  ol^ligation  to  indorse  in  a  representative 
capacity,  he  may  indorse  in  such  terms  as  to  negative  per- 
sonal liability  (a). 

(a)  As  to  thf  liability  of  executors  and  administrators  who 
accept  or  indorse,  sec  Schmittler  v.  Simon,  101  N.  Y.  554. 

§  75.  Time  of  indorsement ;  presumption. —  Except  where 
an  indorsement  bears  date  after  the  maturity  of  the  instru- 


^8  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

inciit  every  negotiation  is  deemed  prima  facie  to  have  been 
effected  before  the  instalment  was  overdue  {a). 

(a)  .Mason  i-.  Noonan.  7  Wis.  GOO.  If  the  defendant  alleges 
that  the  paper  was  indorsed  after  it  was  due,  the  burden  of  proof 
is  on  him  to  show  it.  White  v.  Camp.,  1  Fla.  94.  This  rule  is 
important  because  that,  in  order  to  constitute  one  a  holder  in  due 
course,  he  must  havt>  taken  the  instrument  before  it  was  overdue. 
See  section  91.  The  indorsement  of  an  overdue  note  cannot  relate 
back  to  the  date  of  the  note;  as  a  new  and  independent  contract, 
it  takes  eflFect  from  the  time  it  is  made,  and  must  be  determined 
by  the  laws  then  in  force  and  the  circumstances  then  existing. 
Brown  r.  TTull,  33  Gratt.  23,  30. 

§  76.  Place  of  indorsement ;  presumption. — Except  where 
the  contrary  appears  every  indorsement  is  presumed  prima 
facie  to  have  been  made  at  the  place  where  the  instrument 
is  dated  (a). 

(a)  As  an  indorsement  is  not  merely  a  transfer  of  the  instru- 
ment, but  is  a  new  and  substantive  contract  embodying  in  itself 
all  the  terms  of  the  instrument,  the  place  where  it  was  made  often 
becomes  of  importance.  See  Ingalls  v.  Lee,  9  Barb.  647 ;  Brown  v. 
Hull,  33  Gratt.  27,  29;  Smith  i;.  Caro,  9  Oregon  278;  Bank  of 
British  N.  Am.  v.  Ellis,  6  Sawyer,  98;  Freese  v.  Brownell,  35 
N.  J.  Law  285.  For  example,  an  indorsement  in  Massachusetts  of 
a  note  executed  and  payable  in  New  York  is  a  Massachusetts  con- 
tract, and  governed  by  the  law  of  that  State.  Glidden  v.  Cham- 
berlin,  167  Mass.  486.  An  indorsement  in  blank  of  a  promissory 
note  dated  and  payable  in  the  State  of  New  York  is  presumed 
both  at  common  law  and  under  the  statute  to  have  been  made 
here,  and  one  discounting  the  note  in  good  faith  is  entitled  to 
rely  upon  that  presumption.  Chemical  Nat.  Bank  v.  Kellogg,  183 
N.  Y.  92.  And  a  married  woman,  who,  at  her  residence  in  the 
Stat€  of  New  Jersey,  indorses  in  blank,  and  solely  for  his  benefit, 
her  husband's  promissory  note,  dated  and  payable  in  the  State  of 
New  York,  where  it  is  dicounted  in  good  faith,  without  notice 
that  the  indorser  was  a  non-resident,  or  that  the  indorsement 
was  made  in  another  State  is  estopped  to  deny  that  her  indorse- 
ment is  a  New  York  contract,  and  from  claiming  that  it  is 
a  New  Jersey  contract.     (Id.) 


NEGOTIATION.  59 

§  77.  Continuation  of  negotiable  character. — An  instru- 
ment negotiable  in  its  origin  continues  to  be  negotiable  until 
it  has  been  restrictively  indorsed  or  discharged  by  payment 
or  otherwise  (a).  <??(.*• 

(a)   Cumberland  Bank  v.  Hann,  3  Harr.  (N.  J.)  222.     The  law  :^^-^ 

is  perfectly  well  settled  that  a  note  or  bill  negotiable  in  form  is 
negotiable  as  well  after  as  before  it  becomes  due.    National  Bank  "^^ 

of  Washington  v.  Texas,  20  Wall.  72.    McSherry  v.  Brooks,  46  Md.  ^ 

103,   118;   French   v.  Jarvis,  29   Conn.  347;   Adair  v.  Lenox,   15  O^;. 

Oregon  4S9.     But  the  rights,  duties  and  obligations  of  the  parties  <^ 

are  by  no  means  the  same.  The  instrument  becomes,  according  to 
legal  effect,  payable  on  demand,  so  far  as  the  indorser  is  con- 
cerned; and  presentment  for  payment  must  be  made  within  a 
reasonable  time,  and  due  notice  of  the  dishonor  given  to  the  in- 
dorser. Brown  v.  Hull,  33  Gratt.  23,  28;  Berry  v.  Robinson,  9 
Johns.  121;  Van  Iloosen  v.  Van  Alstyne,  3  Wend.  79;  Poole  v. 
ToUeson,  1  McCord,  200;  Patterson  v.  Todd,  18  Pa.  St.  426; 
Rosson  V.  Carroll,  90  Tenn.  90.  But  if  the  paper  was  presented  at 
maturity  and  notice  of  dishonor  given  to  prior  parties  it  is  not 
necessary  that  the  indorsee  after  maturity  should,  in  order  to 
hold  them,  present  the  paper  again  and  give  them  then  notice  of 
dishonor;  for  the  original  demand  and  notice  were  to  the  benefit 
of  all  subsequent  holders.  French  v.  Jarvis,  29  Conn.  347.  As 
to  the  discharge  of  negotiable  instruments,   see  sections  200-206. 

§  78.  Striking  out  indorsement. —  The  holder  may  at 
any  time  strike  out  any  indorsement  which  is  not  necessary 
tf)  his  title  {a).  The  indorser  whose  indorsement  is  struck 
out,  and  all  indorsers  subsequent  to  him,  are  thereby  re- 
lieve(|  from  liability  on  llic  instrument. 

(a)  New  Haven  Mfg.  Co.  v.  N(!W  Haven  Pulp  &  Board  Co.,  76 
Conn.  126,  131-132  (a  case  arising  under  the  statute).  This  sec- 
tion is  declaratory  of  the  law  as  it  existed  prim-  1n  t]i(>  cnMrtiiicnt 
of  the  statute.  Jerman  v.  Edwards,  29  A  pp.  Cas(>s  T).  C.  r)35. 
Tlif  holder  may  strike  out  all  intervening  indorsements  and  aver 
that  the  first  blank  indorser  indorsfd  immediately  to  himself^ 
Bylcs  on   Bills,   149;   Preston   v.  Mjuiii.  2r.   Conn.   127;   Bank  of 


6o  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

America  v.  Senior,  11  R.  I.  370.  This  may  be  done  at  the  trial, 
and  after  the  phiintiff  has  finished  his  ease.  Mayer  v.  Jadia,  1  M. 
(fc  Kob.  2i7.  See  also  Alorris  v.  Cude,  57  Tex.  3:57;  Rand  v.  Dovey, 
S3  Pa.  St.  281;  Merz  v.  Kaiser,  20  La.  Ann.  379;  Vanarsdale  v. 
Hax,  107  Fed.  Rep.  878.  Where  a  party  becomes  a  holder  of  a 
promissory  note  by  delivery  under  an  indorsement  in  blank  by 
the  payee,  he  is  entitled  to  strike  out  a  subsequent  indorsement 
under  which  he  does  not  claim  title,  and  in  an  action  by  him 
ag:ainst  the  maker  and  payee,  where  there  is  no  defense  to  the 
note  as  against  any  party  whose  name  appears  thereon,  it  is  imma- 
terial whether  such  subsequent  indorsement  is  restrictive  or  not. 
Jerman  v.  Edwards,  29  App.  Cases,  D.  C.  535. 


§  79.  Transfer  without  indorsement ;  effect  of. —  Where 
the  holder  of  an  instrument  payable  to  his  order  transfers  it' 
for  value  without  indorsing  it,  the  transfer  vests  in  the^ 
transferee  such  title  as  the  transferrer  had  therein,  and  the 
transferee  acquires,  in  addition,  the  right  to  have  the  in- 
dorsement of  the  transferrer^ a).  But  for  the  purpose  of 
determining  whether  the'iransferee  is  a  holder  in  due 
course,  the  negotiation  takes  effect  as  of  the  time  when  the 
indorsement  is  actually  made  (b). 

(a)  Simpson  v.  Hall,  47  Conn.  417.  Title  to  an  instrument, 
drawn  to  order,  can  be  transferred  by  delivery  and  by  parol,  and 
the  only  effect  of  the  lack  of  an  indorsement  is  to  make  the  paper 
non-negotiable  and  admit  inquiry  into  the  equities.  Meurer  v. 
Phenix  National  Bank,  42  Misc.  (N.  Y.)  341.  But  under  the 
statute,  as  well  as  under  the  law  merchant,  the  indorsement  is 
required  to  constitute  the  transferee  a  holder  in  due  course.  . 
Mayers  v.  McRimmon,  140  N.  C.  640,  642-G43.  Thus,  the  pur- 
chaser of  a  certified  check,  payable  to  order,  who  obtains  title 
without  the  indorsement  of  the  payee,  holds  it  subject  to  all 
equities  between  the  original  parties,  although  he  paid  full  con- 
sideration, without  nt)tice.  Goshen  National  Bank  v.  Bingham, 
118  N.  Y.  349;  Jenkinson  v.  Wilkinson,  110  N.  C.  532.  And  an 
intention  on  the  part  of  the  payee  and  transferee  to  have  the  paper 
indorsed  is  not  sufficient,  at  least  in  the  absence  of  an  express 
agreement  to  indorse.     It  is  the  act  of  indorsement,  not  the  in- 


Wyvrl^ 


NEGOTIATION.  6 1 

tention,  which  negotiates  the  instrument.  Goshen  National  Bank 
V.  Bingham,  supra.  Where  a  check,  drawn  to  the  order  and  in 
the  hands  of  a  bona  fide  holder  for  value,  has  at  his  request  been 
certified  by  a  bank,  and  is  a  valid  obligation  against  the  maker, 
and  there  are  no  equities  between  him  and  the  bank,  the  holder 
can  recover  of  the  bank  upon  the  check,  although  the  maker  had 
not  indorsed  it  to  him.  Meuer  v.  Phenix  National  Bank,  42 
Misc.  (N.  Y.)  341. 

(6)  An  indorsement  after  notice  of  a  defense  does  not  relate 
back  to  the  transfer,  so  as  to  cut  off  intervening  rights  and 
remedies.  (Id.)  But  in  Beard  v.  Dedolph,  29  Wis.  136,  it  was 
held  that  the  holder  is  protected  against  everything  subsequent  to 
delivery,  the  indorsement  being  held  to  relate  back  to  the  time  of 
delivery  as  to  any  equity  outside  of  the  note  itseK. 

§  8o.  When  prior  party  may  negotiate  instrument. — 
Where  an  instrument  is  neg-otiated  back  to  a  prior  party, 
such  party  may,  subject  to  the  provisions  of  this  act,  reissue 
and  further  negotiate  the  same.  But  he  is  not  entitled  to 
enforce  payment  thereof  against  any  intervening  party  to 
whom  he  was  personally  liable. 


62  THE    NEGOTIABLE    INSTRUMENTS    LAW. 


ARTICLE  V. 

Rights  of  Holder. 

Section  90.  Right  of  holder  to  sue ;  payment. 

91.  What  constitutes  a  holder  in  due  course. 

92.  When  person  not  deemed  holder  in  due  course. 

93.  Notice  before  full  amount  paid. 

94.  When  title  defective. 

95.  What  constitutes  notice  of  defect. 

96.  Rights  of  holder  in  due  course. 

97.  When  subject  to  original  defenses. 

98.  Wlio  deemed  holder  in  due  course. 

§90.  Right  of  holder  to  sue;  payment. —  The  holder  of  a 
negotiable  instrument  may  sue  thereon  in  his  own  name 
(a)  ;  and  payment  to  him  (b)  in  due  course  (c)  discharges 
the  instrument. 

(a)  This  applies  to  a  holder  to  whom  the  instrument  is  in- 
dorsed restrictively.  See  section  67  and  note.  Where  the  plaintiff 
is  the  payee,  the  production  of  the  paper  is  sufficient.  Tullis  v. 
McClary,  128  Iowa,  493;  Williams  v.  Holt,  170  Mass.  351.  And 
where  the  instrument  is  payable  to  bearer,  or,  if  payable  to  order, 
is  indorsed  in  blank,  possession  is  sufficient  evidence  of  title  on 
which  to  maintain  the  action.  Newcombe  v.  Fox,  1  App.  Div. 
389;  Weber  v.  Orton,  91  Mo.  680.  The  court  will  never  inquire 
whether  he  sues  for  himself  or  as  trustee  for  another,  nor  into 
the  right  of  possession,  unless  on  an  allegation  of  mala  fides. 
Ellicott  V.  Martin,  6  Md.  509.  And  the  prima  facie  case  made  in 
favor  of  the  plaintiff  by  his  possession  of  the  instrument  can  not, 
in  the  absence  of  mala  fides,  be  rebutted  by  evidence  that  the  title 
was  in  some  other  party.  (Id.)  As  a  general  rule  possession  by 
the  attorney  for  a  party  is  possession  by  the  party  himself.  Kun- 
kel  V.  Spooner,  9  Md.  462.  But,  of  course,  the  indorsement  must 
be  proved;  the  mere  introduction  of  the  note,  with  the  name 
written  on  the  back,  is  not  sufficient.     Tyson  v.  Joyner,  139  N.  C 


X 


RIGHTS    OF    HOLDER.  63 

69.  The  mere  possession  by  another  than  the  payee,  of  an  unin- 
dorsed negotiable  note  not  paj-able  to  bearer,  is  not  prima  facie 
evidence  of  ownership.     Shepard  v.  Hanson,  9  N.  D.  249. 

(6)  The  instrument  can  be  satisfied  only  by  payment  to  the 
owner  at  the  time  or  to  such  owner's  authorized  agent.  If  the 
recipient  of  the  money  is  not  actuallj'  authorized  the  payment 
is  ineffectual,  unless  induced  by  imambiguous  direction  from, 
the  owner  or  justified  by  actual  possession  of  the  note.  Marling  v. 
Mommensen,  127  Wis.  363. 

(c)  The  maker  of  a  note,  in  order  to  avail  himself  of  the  defense 
of  payment  before  maturity,  must  show  that  the  indorsee  had 
prior  notice  of  the  paymnt.  Yenney  v.  Central  City  Bank,  44 
Neb.  402.  But  where  the  instrument  is  indorsed  "  for  collection," 
the  payment  to  the  indorser  after  the  transfer  is  a  good  defense,  ■ 
even  against  a  claim  of  prior  beneficial  ownership  by  the  indorsee. 
Smith  V.  Bayer,  46  Ore.  143. 

§  91.  What  constitutes  a  holder  in  due  course. — A  holder  /♦#** 

in  due  course  is  a  holder  who  has  taken  the  instrument  under,  ^^^  *Tk**^'  ^  ' 
the  following  conditions  :  -**^  !V 

1.  That  it  is  complete  and  regular  upon  its  face  (a)  ;         _y  7      ^^^.^ 

2.  That  he  became  the  holder   {b),  of  it  before  it  was       ^      _^     j 
overdue  (c),  and  without  notice  that  it  had  been  previously  ••      ,_.  ,  / 
dishonored,  if  such  was  the  fact;                                              ^T^C**l»t*# 

3.  That  he  took  it  in  good  faith  and  for  value  (d)  ;  L^  JTjf  ^. 

4.  That  at  the  time  it  was  negotiated  to  him  he  had  no 
notice  of  any  infirmity  in  the  instrument  or  defect  in  the 
title  of  the  person  negotiating  it  {e). 

(a)  To  determine  the  character  of  an  indorsee  as  a  hona  fide 
holder  for  value  without  notice,  the  point  of  time  at  which  he 
parts  with  his  moin-y  is  the  important  fact.  If  the  paper  was 
then  on  its  face  irrogidar  —  out  of  the  usual  course  of  business  — 
the  effect  of  that  knowledge  on  the  indorsee  could  not  be  pre- 
vented by  subscfiuently  putting  it  in  a  regular  shape.  Loscc  v. 
Bis.sell.  76  Pa.  St.  4r)9,  462.  The  fact  that  the  instrument  is 
post-dated  affords  no  eause  of  suspicion  so  as  to  put  the  transfero(( 
on   infiuiry.     Brewsfcr  r.   ^ff•Card(■l,  ft  Wend.  478.     As  to  incom- 


^' 


04  Tllli    iNEGOTlABLE    INSTRUMENTS     l-AW. 

plete  instruments,  and  the  authority  to  fill  up  blanks  therein,  see 
section  33. 

(6)  Under  the  statute  the  payee  may  be  a  holder  in  due  course. 
Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140;  Vander  Ploeg 
1-.  Van  Zuuk  (Iowa).  112  N.  W.  Rep.  807.  This  is  the  rule  at 
common  law.  See  Watson  v.  Russell,  3  B.  &  S.  34;  5  B.  &  S. 
968;  Nelson  i'.  Cowing,  6  Hill,  333,  339.  Thus,  the  holder  of  a 
draft  drawn  by  a  bank  on  its  correspondent  may  be  deemed  a 
holder  in  due  course,  though  he  is  named  therein  as  payee.  Arm- 
strong r.  American  Exchange  National  Bank,  133  U.  S.  433.  See 
note  to  section  33. 

(c)  Mclvim  V.  King,  58  Md.  502 ;  Marsh  v.  Marshall,  53  Pa.  St. 
396;  Davis  t'.  Miller,  14  Gratt.  1;  Cottrell  v.  Watkins,  89  Va. 
801.  At  one  time  it  was  doubted  whether  the  mere  fact  that  a 
negotiable  note  was  overdue  at  the  time  of  the  transfer  was  in 
itself  sufficient  to  aifect  the  title  of  the  holder,  and  whether  it 
was  not  necessary  that  there  should  be  something  on  the  face 
of  the  paper  besides  the  day  of  payment  to  show  that  it  had  been 
actually  dishonored.  This  doubt  was  expressed  by  Lord  Kenyon 
in  Brown  v.  Davies,  3  T.  R.  80,  decided  in  1789;  but  Ashurst  and 
Buller,  J.J.,  were  of  opinion  that  the  mere  fact  of  its  being  over- 
due at  the  time  of  the  transfer  was  sufficient  to  affect  the  title, 
and  that  one  taking  a  note  under  such  circumstances  takes  it 
upon  the  credit  of  the  transfei-rer.  Subsequently  in  Boehm  v. 
Sterling,  7  T.  R.  423-430,  Lord  Kenyon  gave  his  assent  to  the 
rule  thus  laid  down,  and  it  has  never  since  been  questioned.  A 
promissory  note  matures  when,  by  its  terms,  the  principal  becomes 
due;  and  one  who  purchases  it  in  good  faith,  for  value,  before 
maturity,  is  within  the  protection  of  the  law  merchant,  although 
interest  is  overdue  at  the  time  of  such  purchase.  Kelley  v.  Whit- 
ney, 45  Wis.  110.  But  see  Hart  v.  Stickney,  41  Wis.  630 ;  Newell 
V.  Gregg,  51  Barb.  253.  But  a  note  payable  by  instalments  is 
overdue  when  the  first  instalment  is  overdue  and  unpaid,  and  one 
w^ho  takes  it  afterward  takes  it  subject  to  all  equities  between  the 
original  parties.  Vinton  v.  King,  4  Allen,  562.  A  transfer  upon 
the  day  of  maturity  is  before  the  instrument  is  overdue ;  for  the 
principal  debtor  has  the  whole  of  that  day  in  which  to  pay.  Con- 
tinental Nat.  Bank  v.  Townsend,  87  N.  Y.  8.  But  see  Sargent  v. 
Southgate,  5  Pick.  312;  Ayer  v.  Hutchins,  4  Mass.  370;  Pine  v. 
Smith,  11  Gray,  38.    A  check  deposited  with  a  bank  on  the  day 


RIGHTS    OF    HOLDER.  65 

of  its  date  can  not  be  considered  as  overdue  when  so  deposited. 
Shawniut  National  Bank  v.  Mauson,  168  Mass.  -125.  A  check 
dated  in  a  suburb  of  New  York  City  June  1,  1900,  was  sent  in 
the  course  of  business  to  the  State  of  Kansas,  where  it  arrived 
on  June  8,  1900,  and  was  purchased  by  a  Kansas  bank  in  good 
faith  and  for  value. —  Held,  that  the  check  was  not  overdue  to 
such  an  extent  as  to  put  the  bank  upon  inquiry  or  raise  any  pre- 
sumption that  it  knew  of  any  defense  existing  between  the  original 
parties.  Citizens'  State  Bank  v.  Cowles,  89  App.  Div.  (N.  Y.) 
281,  reversed  on  other  grounds  in  180  N.  Y.  340. 

(d)  Under  this  section,  it  is  not  sufficient  to  constitute  a  bank 
a  holder  in  due  course  that  it  has  discounted  the  paper  and  placed 
the  proceeds  to  the  credit  of  its  customer.  Albany  County  Bank 
V.  People's  loe  Co.  92  App.  Div.  (X.  Y.)  47;  Consolidation  Nat. 
Bank  v.  Kirkland,  99  (Id.)  121;  City  Deposit  Bank  v.  Green,  130 
Iowa,  384;  McKnight  v.  Parsons  (Iowa),  113  N.  W.  Eep.  858; 
Elgin  City  Banking  Co.  v.  Hall  (Tenn.),  108  S.  W.  Eep.  1068. 
And  merely  crediting  to  a  depositor's  account,  the  amount  of 
a  check  drawn  upon  another  bank,  where  the  account  continues 
to  be  sufficient  to  pay  the  check  in  case  it  is  dishonored,  does 
not  make  the  bank  a  holder  of  the  check  in  due  course 
within  this  section.  Citizens'  State  Bank  v.  Cowles,  180  N.  Y. 
346.  So,  where  the  credit  given  by  the  bank  is  only  provisional. 
Commercial  Nat.  Bank  v.  Citizens'  State  Bank,  132  Iowa,  706, 
708,  or  the  paper  is  received  for  collection  only.  Bank  of  America 
V.  Waydell.  187  N.  Y.  115.  But  if  the  bank  incurs  a  liability  by 
reason  of  the  deposit,  or  where  it  obligates  itself  to  honor  a  check, 
it  is  a  holder  for  value.  Montrose  Savings  Bank  v.  Claussen 
(Iowa),  114  N.  W.  Rep.  547.  So,  if  the  depositor  was  indebted  to 
the  bank.  City  Deposit  Bank  v.  Green,  130  Iowa,  384.  Thus, 
where  a  bank  purchased  a  note  and  credited  the  proceeds  to  the 
seller's  account,  which  was  subject  to  check,  being  at  times  over- 
drawn, it  was  held  that  the  bank  was  a  holder  for  value,  though 
on  different  dates,  including  the  date  of  maturity,  the  seller 
had  a  balance  in  tho  bank  exceeding  the  amount  of  the  note. 
Northfiold  Nat.  Bank  v.  Arndt  (Wis.),  112  N.  W.  Kep.  451. 
So,  where  a  bank  discounted  a  note  for  the  payee,  who  was  in- 
debted to  tlie  bank  on  a  note  due  at  tliat  time  and  charged  to  the 
payee's  acc-ount,  and  tlie  account  was  made  good  by  the  applica- 
tion of  the  proceeds  of  the  discount,  it  was  held  that  the  bank 

5 


66  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

was  a  holder  for  value  umltT  this  ssection.  Wallabout  Bank  v. 
Peyton,  123  App.  Div,  (N.  Y.)  727.  But  where  the  avails  of  a 
discount  are  applied  to  an  existing  indebtedness,  the  bank  must 
show  that  there  was  an  agreement  that  they  should  be  applied  in 
payment  and  extinguishment  thereof.  Consolidation  Nat.  Banlv 
r.  Kirkland,  99  App.  Div.  (N.  Y.)  121.  If  one  purehases  an 
accommodation  note  for  cash  and  sells  it  to  a  bona  fide  purchaser 
in  exchange  for  the  purchaser's  note,  the  latter  may  be  a  holder 
in  due  course  within  the  meaning  of  the  statute.  Mehliuger  v, 
Ilarriman,  185  Mass.  245.  Where  the  payees  give  the  usual  writ- 
ten direction  in  accommodation  notes,  at  the  foot  of  the  note, 
"  credit  the  drawer,"  and  the  note  is  aftenvard  discounted  in 
bank,  or  found  in  the  possession  of  any  person  not  a  party  to  the 
original  transaction,  the  presumption  is  that  the  holder  is  a  holder 
for  value,  and  that  the  drawer  received  the  proceeds  according 
to  the  directions  so  given.  Steckel  v.  Steckel,  28  Pa.  St.  233,  235. 
As  to  what  will  constitute  value,  see  section  51.  Prima  facie  value 
is  presumed.     See  section  50. 

(e)  As  to  what  is  necessary  to  constitute  notice,  see  section  95. 

§  92.  When  person  not  deemed  holder  in  due  course. — 
Where  an  instrument  payable  on  demand  is  negotiated  an 
unreasonable  length  of  time  after  its  issue,  the  holder  is  not 
deemed  a  holder  in  due  course  (a). 

(a)  Under  this  section  it  has  been  held  that  a  cheek  issued  on  a 
certain  date,  and  bearing  that  date  and  negotiated  at  noon  of  the 
following  day,  was  not  overdue  so  as  to  carry  to  an  indorsee 
notice  of  its  illegality  or  previous  dishonor.  Matlock  v.  Scheuer- 
man  (Ore.),  93  Pac.  Kep.  823.  So,  a  cashier's  cheek  issued  May 
18th,  and  indorsed  five  days  later,  was  held  to  have  been  nego- 
tiated within  a  reasonable  time.  Singer  Manufacturing  Co.  v. 
Summers,  143  N.  C.  102.  As  to  what  is  reasonable  time  will 
depend  upon  the  facts  of  the  particular  case.  See  section  4.  No 
absolute  measure  can  be  fixed.  A  day  or  two.  Field  v.  Nickerson, 
13  Mass.  131,  137;  seven  days,  Thurston  v.  McKenn,  6  Mass.  428; 
and  even  a  month,  Eanger  v.  Cory,  1  Mete.  369,  is  not  too  long; 
while  eight  months,  American  Bank  v.  Jennes,  2  Mete.  288 ;  Ayres 
V.  TTutchins,  4  Mass.  370;  Nevins  v.  Townsend,  6  Conn.  7;  three 
months  and  a  half,  Stevens  v.  Brice,  21  Pick.  193 ;  and  even  two 


/ 


RIGHTS    OF    HOLDER.  67 

months  and  a  half,  Losee  v.  Durkin,  7  J.  K.  70;  Sice  v.  Cunning- 
ham, 1  Cowen,  397,  404,  have  been  deemed  sufficient  to  discredit  a 
note.  Coupons  payable  to  bearer  are,  when  overdue,  subject  to 
equities;  they  are  not  in  this  respect  like  bank  notes.  McKim  v. 
King,  58  Md.  502. 

§  93.  Notice  before  full  amount  paid. — Where  the  trans- 
feree receives  notice  of  any  infirmity  in  the  instrument  or 
defect  in  the  title  of  the  person  negotiating  the  same  before 
he  has  paid  the  full  amount  agreed  to  be  paid  therefor,  he 
will  be  deemed  a  holder  in  due  course  only  to  the  extent  of 
the  amount  theretofore  paid  by  him  (a). 

(a)  Dresser  v.  Missouri  Etc.  R.  R.  Construction  Co.,  93  U.  S. 
93.  The  case  falls  within  the  general  rule  that  the  portion  of  an 
unperformed  contract  which  is  completed  after  notice  of  a  fraud 
is  not  within  the  principle  which  protects  a  bona  fide  purchaser. 
(Id.)  This  section  is  merely  declaratory  of  the  law  as  it  existed 
before  the  enactment  of  the  statute.  Albany  County  Bank  v. 
People's  Ice  Co.,  O^Ap^.  Div.  (N,  Y.X47.  "^^-^V-^-*     <^   ^  *»  * 

§  94.  When  title  defective. — The  title  of  a  person  who 
negotiates  an  instrument  is  defective  within  the  meaning  of 
this  act  when  he  obtains  the  instrument,  or  any  signature 
thereto,  by  fraud,  duress,  or  force  and  fear,  (a)  or  other 
unlawful  means,  or  for  an  illegal  consideration,  (b)  or 
when  he  negotiates  it  in  breach  of  faith,  or  under  such  cir- 
cumstances as  amount  to  a  fraud  (r). 

(a)  Statute  applied  in  German-American  Bank  v.  Cunning- 
ham, 97  App.  Div.  (X.  Y.)  244.  Whore  a  note  was  executed  by 
several  persons,  and  tlie  signature  of  one  of  them  was  secured 
by  fraudulent  repro.«!entations  as  to  the  charaeter  of  the  instru- 
ment, it  was  held  that  the  note  was  void  under  this  section. 
Aukli.nd  V.  Aniold  (Wis.),  Ill  X.  W.  Bep.  212.  So,  where  sig- 
natures were  securcfl  to  a  note  under  a  promise  that  the  paper 
should  not  beeonie  a  binding  obligation  until'  signed  by  certain 
other   persons,   and    i)art   of   the   other   signatures  were   obtained 


/vi 


68  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

without  a  disclosure  of  tho  conditiomil  character  of  the  prior 
signatures,  it  was  helti  that  the  latter  were  obtained  by  fraud. 
Hodge  V.  Smith,  l.'U)  Wis.  32G.  Commercial  paper  executed  under 
(.luress  is  void,  even  though  there  may  be  some  consideration  to 
support  it.     Magoon  v.  Reber,  76  Wis.  392. 

(6)  Under  this  section  the  title  of  a  person  negotiating  a  note 
is  defective  where  the  only  consideration  wag  usury  on  a  former 
note  between  the  same  parties.     Keene  v.  Behan,  40  Wash.  505. 

(c)  The  fraud  in  putting  the  paper  into  circulation  must  be  a 
fraud  agahist  the  defendant.  Kinney  v.  Kruse,  28  Wis.  189. 
Thus,  the  fact  that  one  who  held  possession  of  a  note  for  the 
payee  put  it  in  circulation  in  fraud  of  his  rights  is  no  defense 
in  a  suit  by  the  holder  against  the  maker.  (Id.)  And  where  the 
fraud  consists  in  the  misapplication  of  the  proceeds  received  for 
the  paper  it  will  not  alfect  the  paper  in  the  hands  of  the  holder, 
as  he  is  not  in  any  manner  bound  to  look  to  their  application, 
nor  responsible  for  the  misappropriation  of  them.  Gray's  Admr. 
V.  Bank  of  Kentucky,  29  Pa.  St.  365.  There  is  no  distinction 
between  obtaining  a  note  by  fraud  and  fraudulently  putting  it 
in  circulation.  National  Revere  Bank  v.  Morse,  163  Mass.  381, 
385.  For  a  case  applying  this  provision  see  Aukland  v.  Arnold, 
131  Wis.  64. 

§  95.  What  constitutes  notice  of  defect. —  To  constitute 
notice  of  an  infirmity  in  the  instrument  or  defect  in  the 
title  of  the  person  negotiating  the  same,  the  person  to  whom 
it  is  negotiated  must  have  had  actual  knowledge  of  the  in- 
firmity or  defect,  or  knowdedge  of  such  facts  that  his  action 
in  taking  the  instrument  amounted  to  bad  faith  (a). 

(a)  The  holder  is  not  bound  at  his  peril  to  be  on  the  alert  for  cir- 
cumstances which  might  possibly  excite  the  suspicion  of  wary  vigi- 
lance; he  does  not  owe  to  the  party  who  puts  the  paper  afloat  the 
duty  of  active  inquiry  in  order  to  avert  the  imputation  of  bad 
faith.  The  rights  of  the  holder  are  to  be  determined  by  the  simple 
test  of  honesty  and  g'ood  faith,  and  not  by  a  speculative  issue 
as  to  his  diligence  or  negligence.  The  holder's  right  cannot  be 
defeated  without  proof  of  actual  notice  of  the  defect  in  title  or 
bad  faith  on  his  part  evidenced  by  circumstances.     Though  he 


RIGHTS    OF    HOLDER.  6^ 

may  have  been  negligent  in  taking  the  paper,  and  omitted  precau- 
tions which  a  prudent  man  would  have  taken,  nevertheless,  unless 
he  acted  iJiala  fide,  his  title,  according  to  settled  doctrines,  will 
prevail.  Valley  Savings  Bank  v.  Mercer,  97  Md.  458,  479;  Cheever 
V.  Pittsburgh,  Shenango  &  Lake  Erie  R.  R.  Co.,  150  N.  Y.  59, 
65 ;  American  Exchange  National  Bank  v.  New  York  Belting,  etc. 
Co.,  148  N.  Y.  705;  Knox  v.  Eden  Musee  Am.  Co.,  148  N.  Y.  454; 
Canajoharie  National  Bank  r.  Diefendorf,  123  N.  Y.  202;  Vos- 
burgh  V.  Diefendorf,  119  N.  Y.  357;  Jarvis  v.  Manhattan  Beach 
Co.,  148  N.  Y.  652;  Murray  v.  Lardner,  2  Wall.  110;  Swift  v. 
Smith,  102  U.  S.  442;  Belmont  v.  Hoge,  35  N.  Y,  65;  Welsh  v. 
Sage,  47  N.  Y.  143;  Nat.  Bank  of  Republic  v.  Young,  41  N.  J. 
Eq.  531 ;  Fifth  Ward  Sav.  Bank  v.  First  Nat.  Bank,  48  N.  J.  Law 
513;  Credit  Company  v.  Howe  Machine  Co.,  54  Conn.  357;  Ladd 
V.  Franklin,  37  Conn.  64;  Croft's  Appeal,  42  Conn.  154;  Morton 
V.  N.  A.  &  Selma  Ry.  Co.,  79  Ala.  590;  Phelan  v.  Moss,  67  Pa. 
St.  59;  Moorehead  i'.  Gilmore,  77  Pa.  St.  118;  Second  National 
Bank  t'.  Morgan,  165  Pa.  St.  199;  Frank  v.  Lilienfeld,  33 
Gratt.  377.  And  as  the  transferee  is  not  bound  to  make 
inquiry,  the  fact  that  the  transferer  lives  near  him  is  not  ma- 
terial.    Seltzer  v.  Deal,  135  N.  C.  428. 

The  payment  of  value  is  a  circumstance  to  be  taken  into 
account,  with  other  facts,  in  determining  the  good  faith  of  the 
purchaser,  but  it  is  not  conclusive.  Cunningham  v.  Scott,  90 
Hun,  410,  411;  Tischler  v.  Schurman,  49  Misc.  (N.  Y.)  257. 
And  while  the  mere  fact  that  paper  has  been  purchased  at  a 
discount  will  not,  ordinarily,  be  evidence  of  bad  faith,  yet  where 
the  discount  is  very  large,  that  circumstance  may  be  considered, 
in  connection  with  other  facts,  in  determining  the  question  of 
the  purchaser's  good  faith.  Williams  v.  Huntington,  08  Md.  500. 
But  a  bank  is  not  chargeable  with  bad  faith  because  it  discounted 
notes  at  the  rate  of  seven  per  cent,  per  annum  when  the  legal 
rate  of  interest  was  but  six  per  cent.  Bank  of  Monongahela 
Yallev  r.  Weston,  172  N.  Y.  259.  And  the  fact  that  a  bank 
purchases  a  chock,  instead  of  receiving  it  on  deposit  for  collection, 
is  not  such  a  deviation  from  the  usual  course  of  business  as  will 
justify  a  conr-lusion  <>f  bud  faith  on  its  part.  Citizens'  State 
Bank  V.  Cowle.%  89  Ai)i).  Div.  CN.  Y.)  281.  Nor  does  it  charge 
nn  indorsee  with  notice  of  an  infirmity  in  n  check  that  the  payee, 
on  transferring  it.  stated  that  the  drawer  ha<l  asked  that  it  bo  held 


~0  THE    iNEC.OTIADLL;    INSTKL'MENTS    LAW. 

for  a  few  days  before  preseutmeiit  for  payment.  Matlock  v. 
Scheuermau  (.Ore,),  93  Pac.  Kep.  825. 

The  uicre  fact  that  the  holder  for  vahic  of  a  promissory  note 
made  by  a  third  party  receives  it  from  a  person  engaged  in  the 
note-brokerage  business,  as  collateral  security  for  a  loan  to  such 
broker,  is  not  sutHcient  to  raise  a  doubt  as  to  the  autliority  of  tlie 
broker  to  so  deal  with  the  note.  American  Ex.  Nat.  Bank  v.  New 
York  Belting  and  Packing  Company,  148  N.  Y.  698.  And  a  bank 
has  a  right  to  assume,  as  to  notes  offei-ed  to  it,  whether  for  dis- 
count or  as  collateral  security,  by  a  customer  who  has  an  account 
with  it,  and  who  is  in  the  habit  of  borrowing  money  from  it,  that 
the  customer  is  acting  in  good  faith  and  within  his  lawful  rights; 
and  the  fact  that  the  customer  is  engaged  in  the  business  of  note- 
brokerage  is  not  enough  to  deprive  the  bank  of  the  right  to  indulge 
in  such  assumption.  (Id.)  The  fraudulent  misappropriation  by 
the  broker  of  the  proceeds  of  discount  is  not  sufficient  to  put 
the  holder  to  the  proof  of  his  bona  fides.  Sloan  v.  The  Union 
Banking  Company,  67  Pa.  St.  470.  And  the  fact  that  the  trans- 
feree may  know  that  the  person  from  whom  he  receives  the  paper 
is  "  crooked  "  in  business  matters  does  not  affect  his  title  or  make 
it  his  duty  to  inquire  about  the  paper.  Seltzer  v.  Deal,  135  N.  C. 
428.  In  the  case  last  cited,  the  court  said:  "It  would  be  almost 
impossible  for  the  business  of  banking  to  be  carried  on  if  it  was 
incumbent  on  bank  officers,  whenever  negotiable  paper  was  offered 
for  discount  or  sale,  to  inquire  into  whether  any  of  the  parties 
to  be  charged  were  crooked  in  their  business  methods." 

In  Chemical  Nat.  Bank  v.  Kellogg  (183  N.  Y.  92,  96)  it  was 
said :  "  The  only  practicable  rule  is  to  make  the  face  of  the 
paper  itself,  when  free  from  suspicion,  sufficient  evidence,  in  the 
absence  of  notice,  against  all  "who  aided  to  put  it  into  circulation 
in  that  condition,  unless  the  note  is  void  by  the  positive  command 
of  a  statute,  such  as  the  act  against  usury.  No  other  rule  would 
work  well,  for  it  would  be  intolerable  if  every  bank  had  to  learn 
the  true  history  of  each  piece  of  paper  presented  for  discount 
before  it  could  act  in  safety.  It  is  better  that  there  should  be 
an  occasional  instance  of  hardship  than  to  have  doubt  and  dis- 
trust hamper  a  common  method  of  making  commercial  exchanges." 
Accordingly,  it  was  held  in  that  case  that  a  married  woman  who, 
for  her  husband's  accommodation,  had  indorsed  a  note  dated  and 
payable  in  New  York,  was  estopped  from  showing,  as  against  a 


RIGHTS    OF    HOLDER.  /I 

New  York  bank  which  had  discounted  the  paper  in  good  faith, 
that  the  indorsement  had  been  made  in  New  Jersey,  where  her 
contract  was  void. 

One  -who  receives  the  notes  of  a  corporation  from  one  of  its 
officers  in  payment  of,  or  as  security  for,  a  personal  debt  of  such 
officer  does  so  at  his  peril.     Prima  facie  the  act  is  unlawful,  and 
unless  actually  authorized,  the  purchaser  will  be  deemed  to  have 
taken  them  with  a  notice  of  the  rights  of  the  corporation.    Wilson 
^.   Metropolitan  Ry.   Co.,   120   N.   Y.   145,   150.     And  where  the 
maker  of  a  note,  which  is  payable  to  his  order,  and  purports  to  be 
indorsed  by  a  corporation,  procures  it  to  be  discounted  for  his  own 
benefit,  this  of  itself,  if  unexplained,  is  notice  that  the  indorse- 
ment ^not  made  in  the  usual  course  of  business,  but  is  for  the 
accommodation  of  the  maker.     National  Park  Bank   v.  German- 
American   Mutual  Warehousing  and  Security   Company,   116  N. 
Y.  281.     But  ^le  mere  fact  that  the  payee  of  a  promissory  note, 
made  by  a  cJ?rporation,  is  a  director  of  such  corporation,  is  not 
notice  to  a  transferee  of  any  infirmity  in   the  paper,  nor   is  it 
sufficient  to  put  him  upon  inquii-y  concerning  the  circumstances 
under  which  it  wag  issued;  and  the  rule  applicable  to  notes  made 
by  officers  of  a  corporation  to  their  own  order  and  used  to  pay 
their    individual   obligations,   has   no   application   to   notes  made 
by  duly  authorized  officers  payable  to  a  director.     Orr  v.  South 
Amboy  Terra  Cotta  Co.,  113  App.  Div.  (N.  Y.)  103. 

§  96.  Rights  of  holder  in  due  course. — A  holder  in  due 
course  holds  the  instrument  free  from  any  defect  of  title 
(a)  of  prior  parties  and  free  from  defenses  available  to 
prior  parties  amon.s^  themselves,  (h)  and  may  enforce  pay- 
ment of  the  instrument  for  the  full  amount  thereof  (r) 
ao-ainst  all  parties  liable   thereon. 

{a)  Under  this  section,  a  holder  in  duo  course  of  a  promissory 
note  payable  to  bearer  can  acquire  a  good  title  to  the  note  from 
oiu-  who  has  stolen   it.     Massachusetts  Nat.   Bank    r.   Sii.nv.  1S7 

Mass.  IfiO. 

{}))  One  of  the  most  important  questions  ihat  has  arisen  under 
the  statute  is  whether  a  holder  in  duo  course  may  recover  u|)on 
paper  void  as  between  the  immediate  parties  because  given   in 


72  TllE    iNEGOTlABLE   INSTRUMENTS    LAW. 

violation  of  some  statute,  as,  lor  example,  where  the  instrument 
is  given  for  a  gambling  debt,  or  is  tainted  with  usury.  In  Wirt 
V.  Stubblotiold,  17  App.  Cas.  1).  C.  283,  it  was  held  that  under 
the  jS'egotiable  Instruments  Law  a  bona  fide  holder  may  enforce 
a  promissory  note  against  the  maker,  even  though  the  note  wag 
given  for  a  gambling  debt,  and  that  this  statute  has  repealed  the 
statutes  of  16  Car.  2  Ch.  7  and  9  Anne,  Ch.  14,  which  were  in 
force  in  the  District  of  Columbia.  In  the  course  of  the  opinion 
it  was  said  by  Alvey,  C.  J. :  "  We  know,  moreover,  that  the  great 
and  leading  object  of  the  act,  not  only  with  Congress,  but  with 
the  large  number  of  the  principal  commercial  States  of  the  Union 
that  have  adopted  it,  has  been  to  establish  a  uniform  system  of 
law  to  govern  negotiable  instruments  wherever  they  might  circu- 
late or  be  negotiated.  It  was  not  only  uniformity  of  rules  and 
principles  that  was  designed,  but  to  embody  in  a  codified  form, 
as  fully  as  possible,  all  the  law  upon  the  subject,  to  avoid 
conflict  of  decisions,  and  the  effect  of  mere  local  laws  and 
usages  that  have  heretofore  prevailed.  The  great  object  sought 
to  be  accomplished  by  the  enactment  of  the  statute,  was  to  free 
the  negotiable  instrument,  as  far  as  possible,  from  all  latent  or 
local  infirmities  that  would  otherwise  inhere  in  it  to  the  prejudice 
and  disappointment  of  innocent  holders  as  against  all  the  parties 
to  the  instrument  professedly  bound  thereby.  This  clearly  could 
not  be  effected  so  long  as  the  instrument  was  rendered  absolutely 
null  and  void  by  local  statute,  as  against  the  original  maker  or 
acceptor,  as  is  the  case  by  the  operation,  indeed,  by  the  express 
provision,  of  the  statutes  of  Charles  and  Anne." 

And  in  the  late  case  of  Schlesinger  v.  Lehmaier  (191  N.  Y.  G9) 
the  Court  of  Appeals  of  New  York  held  that  the  provisions  of 
the  State  Banking  Law  on  the  subject  of  usury  are  to  be  construed 
in  connection  with  section  96  of  the  Negotiable  Instruments  Law, 
and  that  a  bank  which  had  purchased  paper  infected  with  usury, 
could  not  recover  on  the  same  without  showing  that  it  became  a 
holder  in  due  course.  The  court  said:  "It  pertains  to  negotiable 
instruments,  and  should  be  construed  in  connection  with  the  other 
legislation  upon  the  same  subject.  In  the  Negotiable  Instruments 
Law  it  is  expressly  provided  that  a  holder,  who  becomes  such 
before  maturity  in  good  faith  and  for  value  without  notice  of 
any  infirmity,  holds  the  same  '  free  from  any  defect  of  title 
of  prior  parties  and  free  from  defenses  available  to  prior  parties 
among  themselves,  and  may  enforce  the  payment  of  the  instru- 


RIGHTS    OF    HOLDER.  y  T^ 

ment  for  the  full  amount  thereof  against  all  parties  liable 
thereon.'  Here  we  have  the  legislative  intent  expressed  in  clear 
and  unmistakable  language.  It  establishes  a  just  and  proper  rule 
which  protects  the  bank  in  making  purchases  of  commercial  paper 
in  good  faith  before  maturity,  for  value  and  without  notice  of 
infirmity.  But  where  it  purchases  with  actual  knowledge  of  the 
infirmity  or  defect  or  knowledge  of  such  facts  that  its  action 
in  taking  the  instrument  amounted  to  bad  faith,  it  ig  not  pro- 
tected." See  also  Schlesinger  v.  Gilhooly,  189  N.  Y.  1,  34; 
Schlesinger  v.  Kelly,  114  App.  Div.  (N.  Y.)  546,  552-555;  Broad- 
way Trust  Co.  V.  Manheimer,  47  Misc.  (N.  Y.)  465. 

But,  on  the  other  hand,  it  has  been  held  in  Kentucky  that  this 
section  applies  only  to  paper  that  might  have  been  obligatory 
between  the  parties  to  it,  and  that  hence  a  holder  in  due  course 
cannot  recover  upon  a  note  given  for  a  gambling  debt,  or  given 
in  violation  of  the  statute  respecting  "  peddlers'  notes."  Alex- 
ander V.  Hazelrigg,  97  S.  W.  Rep.  353;  Lawgon  v.  First  Nat. 
Bank,  102  S.  W.  Rep.  324.  In  the  ease  first  cited,  the  court  said: 
"  It  has  been  the  policy  of  this  State  to  suppress  gaming,  and  the 
statutes  making  gaming  contracts  void  were  founded  upon  what  the 
Legislature  has  for  many  years  deemed  to  be  sound  public  policy. 
It  is  not  conceivable  that  the  General  Assembly,  in  the  passage 
of  the  Act  of  1904  for  the  protection  of  innocent  holders  of  nego- 
tiable instruments,  intended  to  or  did  repeal  section  1955,  Ky.  St. 
1903,  which  declares  all  gaming  contracts  void.  In  our  opinion, 
the  disappointment  now  and  then  of  an  innocent  holder  of  a 
negotiable  instrument  would  not  be  as  hurtful  and  injurious  to 
the  best  interests  of  the  State  as  the  removal  of  the  ban  from 
gaming  contracts."  And  in  the  other  Kentucky  case  cited  it 
was  said :  "  The  negotiable  instruments  statute  is  a  most  compre- 
henaive  piece  of  legislation.  It  goes  into  minutest  detail  in  deal- 
ing with  the  suV)jects  embraced  by  it.  The  whole  scope  of  it  is 
shown  to  be  the  dealing  with  commercial  paper,  so  as  to  protect 
innocent  purchasers  of  such  against  mere  defenses  available  as 
between  the  original  parties.  It  gives  such  paper  currency,  free 
from  original  defenses.  But  it  applies  only  to  paper  that  might 
have  been  obligatory  between  the  parties.  But,  where  the  parties 
were  never  bound  Vx'causc  the  law  made  the  note  void,  as  contrary 
to  public  policy  as  expressed  in  the  statutes,  the  negotiable  in- 
struments act  does  not  apply,  and  ought  not  to.     The  prevention 


74  THE    iNEGOTlABLli   liNSTRUMENTS   LAW. 

of  criuio  is  of  more  iiaportauce  than  I  he  fostering  of  commerce. 
The  hiter  act  should  be  read  in  view  of  its  purpose,  and  not  aa 
intending  to  repeal  other  statutes  passed  in  the  exercise  of  the 
police  power  of  the  State  to  suppress  crime  and  fraud." 

The  subject  is  one,  perhaps,  upon  which  the  courts  will  never 
agree;  for  they  will  construe  the  section  with  reference  to  the 
policy  of  their  respective  States.  In  some  States,  the  require- 
ments of  commerce  w-ill  be  the  controlling  consideration;  iu 
others,  the  protection  of  the  weak  and  the  ignorant.  The  modern 
view  ig  admirably  expressed  in  Chemical  JS^at.  Bank  v.  Kellogg 
(183  ^'.  Y.  92),  where  it  was  said  by  Vann,  J.:  "The  business 
of  the  country  is  done  so  largely  by  means  of  commercial  paper 
that  the  interests  of  commerce  require  that  a  promissory  note, 
fair  on  its  face,  should  be  as  negotiable  a^  a  government  bond. 
Every  restriction  upon  the  circulation  of  negotiable  paper  is  an 
injury  to  the  State,  for  it  tends  to  derange  trade  and  hinder  the 
transaction  of  business."  And  it  is  plain  that  if  a  negotiable 
instrument  is  to  be  void  in  the  hands  of  a  holder  in  due  course, 
because  it  was  given  for  a  usurious  loan,  or  for  a  gambling  debt, 
or  to  a  "  peddler,"  or  for  the  price  of  a  stallion,  or  for  a  lightning- 
rod,  it  is  not  merely  that  instrument  alone  that  is  affected,  but  a 
doubt  is  cast  upon  all  commercial  paper  originating  in  that  com- 
munity. For  other  cases  applying  local  statutes,  see  Quiggle  v. 
Herman,  131  Wis.  379  (note  given  for  a  stallion),  Arndt  v. 
Sjoblom,  131  Wis.  642  (note  given  for  lightning-rods)  National 
Bank  of  Commerce  v.  Pick,  13  N.  D.  74  (note  given  to  foreign 
corporation  having  no  State  license),  Sullivan  v.  German  Nat. 
Bank,  18  Colo.  App.  99  (certificate  of  deposit  transferred  for 
gambling  debt),  Gordon  v.  Levine,  194  Mass.  418  (note  made  on 
Sunday) . 

(c)  This  is  the  rule  of  the  Supreme  Court  of  the  United  States. 
Cromwell  v.  County  of  Sac,  96  U.  S.  60.  There  is  considerable 
conflict  in  the  decisions  of  the  State  courts.  In  the  case  cited  the 
Supreme  Court  said :  "  We  are  of  opinion  that  a  purchaser  of  a 
negotiable  security  before  maturity,  in  cases  where  he  is  not  per- 
sonally chargeable  with  fraud,  is  entitled  to  recover  its  full 
amount  against  its  maker,  though  he  may  have  paid  less  than 
Its  par  value,  whatever  may  have  been  its  original  infirmity.  We 
are  aware  of  numerous  decisions  in  conflict  with  this  view  of  the 
law;  but  we  think  the  sounder  rule,  and  the  one  in  consonance 
with  the  common  understanding  and  usage  of  commerce,  is  that 


RIGHTS    OF    HOLDER.  75 

the  purchaser,  at  whatever  price,  takes  the  benefit  of  the  entire 
obligation  of  the  maker.  Public  securities  and  those  of  private 
corporations  are  constantly  fluctuating  in  price  in  the  market, 
one  day  being  above  par  and  the  next  below  it,  and  often  passing 
within  short  periods  from  one-half  of  their  nominal  to  their  full 
value.  Indeed,  all  sales  of  such  securities  are  made  with  refer- 
ence to  prices  current  in  the  market,  and  not  with  reference  to 
their  par  value.  It  would  introduce,  therefore,  inconceivable  con- 
fusion if  bona  fide  purchasers  in  the  market  were  restricted  in 
their  claims  upon  such  securities  to  the  sums  they  had  paid  for 
them.  This  rule  in  no  respect  impinges  upon  the  doctrine  that 
one  who  makes  a  loan  upon  such  paper,  or  takes  it  as  collateral 
security  for  a  precedent  debt,  may  be  limited  in  his  recovery  to 
the  amount  advanced  or  secured."  See  also  Birrell  v.  Dickerson, 
64  Conn.  61 ;  jclowland  v.  Fowler,  47  Conn.  349 ;  Williams  v.  Hunt- 
ington, 68  Md.  590;  Moore  v.  Baird,  30  Pa.  136.  The  statute 
changes  the  rule  in  New  York.  Ilarger  v.  Wilson,  63  Barb.  237; 
Huff  V.  Wagner,  63  Barb.  230;  Todd  v.  Shclbourne,  8  Hun,  512. 
See  also  llolcomb  v.  Wyckoff,  35  N.  J.  Law  38;  Bramhall  v.  At- 
lantic National  Bank,  36  N.  J.  Law  243 ;  Oppenheimer  v.  Farmers' 
and  Mechanics'  Bank,  97  Tenn.  19.  Under  this  section,  a  bona 
fide  purchaser  of  a  note  and  mortgage,  is  not  limited  to  a  recov- 
ery of  the  amount  paid  therefor,  but  is  entitled  to  enforce  the 
same  for  the  full  amount  due  thereon,  even  though  the  execution 
of  the  note  was  induced  by  fraud,  and  it  was  bought  at  a  heavy 
discount.  Lasaas  v.  McCarty,  47  Ore.  474.  As  to  amount  of 
recovery  where  instrument  taken  as  collateral  security,  see 
section  53.  For  cases  where  the  purchaser  has  paid  only  part  of  the 
amount  agreed  to  be  paid  before  receiving  notice,  see  section  93. 


§  97.  When  subject  to  original  defenses. —  In  the  hands 
of  any  holder  other  than  a  holder  in  due  course,  a  nego- 
tiable instrument  is  subject  to  tlie  same  defenses  as  if  it 
were  non-negotiable  (a).  T'ut  a  lioldcr  who  derives  his  title 
through  a  holder  in  due  course,  and  who  is  not  himself  a 
party  to  any  fraud  or  illegahty  affecting  the  instrument,  has 


76  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

all  the  rights  of  such  former  holder  in  respect  of  all  parties 
prior  to  the  latter  {b). 

(a)  It  was  not  deemed  expedient  to  make  provision  as  to  what 
equities  the  transferee  will  be  subject  to;  for  the  matter  may  bo 
affected  by  the  statutes  of  the  various  States  relating  to  set-off 
and  counter-claim.  In  an  act  designed  to  be  uniform  in  the 
various  States,  no  more  can  be  done  than  fix  the  rights  of  holders 
in  due  course.  On  the  question  whether  only  such  equities  may 
be  asserted  as  attach  to  the  paper,  or  whether  equities  arising  out 
of  collateral  matters  may  also  be  asserted,  the  decisions  are  con- 
flicting. In  England  it  was  decided  in  Burroughs  v.  Moss,  10 
Barn.  (S:  Cress.  558,  that  the  indorsee  of  an  overdue  bill  is  liable  to 
such  equities  only  as  attach  on  the  bill  or  note  itself,  and  not  to 
claims  arising  out  of  collateral  matters,  such  as  a  general  set-off 
is.  This  is  a  leading  case,  and  has  since  been  uniformly  followed 
in  that  country.  Stein  v.  Yglesias,  1  Crom.  Mees.  &  Eos.  565; 
Whitehead  v.  Walker,  10  Mees.  &  Welsh.  696.  See  also  Hughes  v. 
Large,  2  Pa.  St.  103;  Long  v.  Rhawn,  75  Pa.  St.  128;  Young  v, 
Shriner,  80  Pa.  St.  463;  Davis  v.  Miller,  14  Gratt.  1;  Kilcrease  v. 
White,  6  Fla.  45;  Cumberland  Bank  v.  Ilaun.,  3  Harrison,  223; 
Chandler  v.  Drew,  6  N.  H.  469;  Robertson  v.  Breedlone,  7  Porter, 
541;  Tuscumbia,  Etc.,  R.  R.  Co.  et  al.  v.  Rhodes,  8  Ala.  206-224; 
Robinson  v.  Lymon,  10  Conn.  31;  Steadman  v.  Jilman,  Id.,  56; 
Adair  v.  Lenox,  15  Oregon,  489.  A  person  to  whom  the  instru- 
ment is  transferred  as  a  gift  takes  it  subject  to  all  equities  then 
existing  between  the  original  parties,  but  not  subject  to  those 
which  arise  thereafter.  First  Nat.  Bank  of  Chaniplain  v.  Wood, 
128  N.  Y.  35;  Baxter  v.  Little,  6  Met.  7. 

(h)  Whenever  negotiable  paper  has  passed  into  the  hands  of  a 
party  unaffected  by  previous  infirmities  its  character  as  an  avail- 
able security  is  established,  and  its  holder  can  transfer  it  to  others 
with  the  like  immunity.  Cover  v.  Myers,  75  Md.  406;  Black  v. 
First  National  Bank  of  Westminster,  96  Md.  399.  The  principle 
is,  that  the  promise  being  good  to  the  prior  indorsee  or  holder, 
free  from  objection  on  the  ground  of  fraudulent  or  illegal  con- 
sideration, he  has  the  power  of  transferring  it  to  others,  with  the 
same  immunity,  as  an  incident  to  the  legal  right  which  he  had 


RIGHTS    OF    HOLDER.  "JJ 

acquired  in  the  instrument.  Kinney  v.  Kruse,  28  Wis.  183,  190- 
191.  See  also  Boyd  v.  McCann,  10  Md.  118.  Thus,  if  A  gives 
to  B  his  note,  and  C  becomes  the  holder  thereof  in  due  course, 
any  subsequent  holder  could  stand  on  C's  title  and  enforce  the 
note,  against  A,  though  before  taking  the  same  he  had  notice  of  a 
defense  which  A  had  to  the  note  as  against  B.  But  if,  in  the  case 
supposed,  the  note  should  be  indorsed  by  C  to  D,  and  by  the  latter 
to  E,  and  by  him  to  F,  under  circumstances  which  would  give  D 
a  defense  as  a  party  thereto,  then  if  F  had  notice  of  the  equities 
of  both  A  and  D  he  could  enforce  the  note  against  A,  but  not 
against  D. 

§  98.  Who  deemed  holder  in  due  course. —  Every  holder 
is  deemed  prima  facie  to  be  a  holder  in  due  course  (a)  ;  but 
when  it  is  shown  that  the  title  of  any  person  who  has  nego- 
tiated the  instrument  was  defective,  the  burden  is  on  the 
holder  to  prove  that  he  or  some  person  under  whom  he 
claims  acquired  the  title  as  a  holder  in  dtie  course  (b).  Btit 
the  last-mentioned  rule  does  not  apply  in  favor  of  a  party 
who  became  bound  on  the  instrument  prior  to  the  acquisi- 
tion of  such  defective  title  (c). 

(a)  It  is  not  necessary  for  the  holder  to  offer  in  the  first  in- 
stance any  proof  that  he  is  an  innocent  purchaser.  Kerr  v.  An- 
derson, N.  D.  Ill,  N.  W.  Rep.  614.  The  presumption  is  that  he 
received  it  bona  fide  and  for  value.  Gray's  Adinr,  v.  Bank  of 
Kentucky,  29  Pa.  St.  3G5;  Wilson  v.  Lazier,  11  Gratt.  477. 

(6)  Statute  applied  in  German  Am.  Bank  v.  Cunningham,  97 
App.  Div  (N  Y.)  244;  Mitchell  v.  Baldwin,  88  (Id.)  2G5,  2G9; 
Hodge  V.  Smith,  130  Wis.  326;  Singer  Manufacturing  Co.  v. 
Summers,  143  N.  C.  102;  M(dCnight  v.  Parsons  (Iowa), 
113  N.  W.  Rep.  858;  Rovicz  v.  Nichells,  9  N.  D.  536;  Regester'g 
Sons  Co.  V.  Reed,  185  Mass.  226.  227;  Cook  v.  Am.  Tubing  & 
Webbing  Co.  (R.  I.)  65  Atl  Rep.  641;  Keene  v.  Behan.  40  Wash. 
505;  Kerr  v.  Anderson  (N.  D.),  Ill  N.  W.  Rep.  614.  The  holder 
may  make  out  his  title  by  presumption  until  it  is  impeached  by 
evidence  showing  the  paper  had  a  fraudulent  or  illegal  itiception. 
When  this  is  done  he  can  no  longer  rest  upon   presumption,  but 


78  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

it  is  inounibcnt  upon  him  to  show  the  circumstances  under  which 
it  came  into  his  possession,  and  that  he  has  acted  in  good  faith. 
Oanajoharie  National  Bank  v.  Diefendorf,  123  N.  Y.  191;  Joy  v. 
iJiefcndorf,  130  N.  Y.  G;  Jordan  i'.  Grover,  99  Cal.  194;  Market 
and  Fulton  Nat.  Bank  v.  Sargent,  85  Me.  349;  Haines  v.  Merrill, 
56  N.  J.  Law,  312 ;  Sullivan  v.  Langley,  120  Mass.  437 ;  Merchants' 
National  Bank  v.  Haverhill  Iron  Works,  159  Mass.  158;  Conant  v. 
Johnston,  165  Mass.  450,  452;  National  Ivcvcrc  Bank  v.  iMorse, 
103  Mass.- 381,  385;  Williams  v.  Huntington,  08  Md.  590;  Griffith 
V.  Shipley,  74  Md.  591;  Ellicott  v.  Martin,  0  Md.  509;  Hutchin- 
son I'.  Boggs  &  Kirk,  28  Pa.  St.  294;  Wilson  v.  Lazier,  11  Gratt. 
477;  Vathir  v.  Zane,  6  Gratt.  246.  The  statute  requires  the  holder 
to  show  affirmatively  the  facts  constituting  good  faith  upon  his 
part;  and  it  is  not  sufficient  for  him  to  prove  that  he  acquired 
the  note  before  maturity  for  value.  Keene  v.  Behan,  40  Wash. 
505.  And  where  the  plaintiff  seeks  to  establish  this  by  his  own 
testimony,  the  credibility  of  such  testimony,  though  it  is  undis- 
puted, is  for  the  jury.  Jay  v.  Diefendorf,  supra.  Where  negotia- 
ble securities  have  been  stolen  and  negotiated,  the  burden  is  upon 
the  holder  to  show  that  he  is  himself  a  holder  in  due  course,  or 
that  he  claims  under  such  a  holder;  and  there  is  no  presumption 
that  the  thief  negotiated  the  securities  before  they  became  due. 
Northampton  Nat.  Bank  v.  Kiddei?,  106  N.  Y.  221;  Hinckley  v. 
Merchants'  Nat.  Bank,  131  Mass.  147. 

The  rule  adopted  in  the  statute  was  the  one  which  prevailed  in 
New  York  and  many  other  States.  The  rule  which  obtains  in 
the  Federal  Courts  imposes  upon  the  defendant  the  burden  of 
proving  bad  faith.  First  Nat.  Bank  v.  Moore,  148  Fed.  Rep.  953, 
957;  Murray  v.  Lardner,  2  Wall.  110;  Hotchkisa  v.  National  Bank, 
21  Wall.  354;  Collins  v.  Gilbert,  94  U.  S.  753;  King  v.  Doane, 
139  U.  S.  166.  Where  an  inference  may  be  dravsm  from  the  sur- 
rounding circumstances  that  on  the  one  hand  tends  to  discredit 
plaintiflf's  testimony  as  to  his  lack  of  knowledge  concerning  the 
infirmity  in  the  paper  and  his  good  faith  in  taking  it,  and  on  the 
other  hand  tends  to  esrtablish  lack  of  good  faith,  the  question  is 
for  the  jury.  Matlock  v.  Scheuerman  (Ore.),  93  Pac.  Rep.  823; 
McKnight  V.  Parsons  (Iowa),  113  N.  W.  Rep.  858;  M.  Groh's 
Son's  Co.  V.  Schneider,  34  !Miso.  (N.  Y.)  195.  Under  this  section 
an  instruction  that  the  burden  is  on  the  holder  to  show  "  that 
some  person   imder  whom  he  claims   acquired  the  title  in  good 


RIGHTS    OF    HOLDER.  79 

faith"  is  erroneous.  Hawkins  v.  Young  (Iowa),  114  N.  W.  Eep. 
1U41.  That  the  payee  is  described  as  "  trustee "  does  not  let  in 
defenses  against  a  bona  fide  holder  for  value.     Bank  v.  Looney,  99 

Tenn.  278. 

(c)  The  last  sentence  is  necessary  to  qualify  the  general  state- 
ment. If  A  issues  his  note  to  B,  and  C  gets  possession  of  it  and 
fraudulently  negotiates  it  to  D,  the  fraud  of  C  in  nowise  affects  A, 
and  is  no  defense  to  him  when  sued  on  the  instrument  by  D. 
Thus,  it  has  been  held  that  the  fact  that  one  who  Keld  possession 
of  a  note  for  the  payee  puts  it  in  circulation  in  fraud  of  his 
rights  is  no  defense  in  a  suit  by  the  holder  against  the  maker; 
nor  does  it  change  the  burden  of  proof,  so  as  to  require  the  plain- 
tiff to  show  in  the  first  instance  that  he  is  a  bona  fide  holder  for 
value.    Kinney  v.  Kruse,  28  Wis.  183. 


So  THE   NEGOTIABLE   INSTRUMENTS   LAW. 


ARTICLE  VI. 

Liability  of  Parties. 

Section  no.  Liability  of  maker. 

111.  Liability  of  drawer. 

112.  Liability  of  acceptor. 

113.  When  person  deemed  indorser. 

114.  Liability  of  irregular  indorser. 

115.  Warranty;  where  negotiation  by  delivery,  et 

cetera. 

116.  Liability  of  general  indorsers. 

117.  Liability  of  indorser  where  paper  negotiable 

by  delivery. 

118.  Order  in  which  indorsers  are  liable. 

119.  Liability  of  agent  or  broker. 

§  no.  Liability  of  maker. —  The  maker  of  a  negotiable 
instrument  b;)''  making  it  engages  that  he  will  pay  it  accord- 
ing to  its  tenor  (a)  ;  and  admits  the  existence  of  the  payee 
and  his  then  capacity  to  indorse  (b). 

(a)  An  indorsee  of  a  promissory  note  cannot  maintain  a  joint 
action  against  the  ten  makers  of  the  note,  where  the  note  on  its 
face  states  that  the  liability  of  each  of  the  makers  is  limited  to 
one-tenth  of  the  amount  of  the  note.  National  Bank  of  Phoenix- 
ville  V.  Buckwalter,  214  Pa.  St.  289.  The  fact  that  the  holder  had 
other  collateral  securities  for  the  same  debt  more  than  sufficient 
to  cover  it,  from  which,  however,  the  debt  had  not  been  realized, 
is  not  a  ground  of  defense  on  the  part  of  the  maker.  Lord  v. 
Ocean  Bank,  20  Pa.  St.  384. 

(fc)  If  the  payee  is  a  fictitious  or  non-existing  person  the  instru- 
ment is  payable  to  bearer.  Section  9.  Where  the  name  of  the 
payee  is  a  trade  or  assumed  name,  and  the  instrument  is  issued 
for  value,  the  maker  is  estopped  from  setting  up  that  the  instru- 


LIABILITY    OF    PARTIES. 


8l 


ment  is  payable  to  a  fictitious  payee,  if  by  such  averment  the 
instrument  would  be  defeated.  Jones  v.  Home  Furnishing  Co., 
9  App.  Div.  (N.  y.)  103. 

§  III.  Liability  of  drawer. — The  drawer  by  drawing  the 
instrument  admits  the  existence  of  the  payee  and  his  then 
capacity  to  indorse;  and  engages  that  on  due  presentment 
the  instrument  will  be  accepted  and*  paid,  or  both,  according 
to  its  tenor,  and  that  if  it  be  dishonored  and  the  necessary 
proceedings  on  dishonor  be  duly  taken,  he  will  pay  the 
amount  thereof  to  the  holder,  or  to  any  subsequent  in- 
dorser  who  may  be  compelled  to  pay  it.  But  the  drawer 
may  insert  in  the  instrument  an  express  stipulation  negativ- 
ing or  limiting  his  own  liability  to  the  holder. 

§112.  Liability  of  acceptor. —  The  acceptor  by  accepting  ^.^^^-^.^-.^ 
the  instrument  engages  that  he  will  pay  it  according  to  the 
tenor  of  his  acceptance  (a)  ;  and  admits : 

1.  The  existence  of  the  drawer,  the  genuineness  of  his 
signature  (b),  and  his  capacity  (c)  and  authority  (d)  to 
draw  the  instrument ;  and 

2.  The  existence  of  the  payee  and  his  then  capacity  to" 
indorse  (e). 

(a)  The  discounting  of  a  bill  by  the  drawee  who  has  not  ac- 
cepted it  is  neither  payment  nor  a  promise  to  pay  according  to 
its  tenor  and  eifect,  but  puts  him  in  the  position  of  an  indorsee 
for  value,  with  right  of  action  against  drawer  and  indorser. 
Swope  V.  Ross,  40  Pa.  St.  186. 

(h)  National  Park  Bank  v.  Ninth  National  Bank,  46  N.  Y.  77; 
Marine  National  Bank  v.  National  City  Baidc,  .^)9  N.  Y.  67;  Bank 
of  St.  Albans  v.  Farmers'  and  Mechanics'  Bank,  10  Vt.  141 ;  Bank 
of  U.  S.  V.  Bank  of  Georgia,  10  Wheat.  333.    In  Pennsylvania  this 


i 


*  Error  in  engrossing.  The  word  in  the  Commissioners'  draft  is 
"  or."  The  mistake  was  not  corrected  by  Laws  N.  Y.  1898,  c.  336.  It 
occurs  only  in  the  New  York  statute. 

6 


82  .  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

matter  was  formerly  regulated  by  the  statute  of  1849.  The  effect 
of  that  statute  and  the  eases  upon  the  subject  was  that  the  mere 
acceptance  or  payment  of  forticil  paper  was  no  longer  of  itself  a 
bar  to  the  recovery  of  the  money  by  the  party  paying,  nor  was 
such  party  absolutely  bound  to  discover  and  give  notice  of  the 
forgery  on  the  very  day  of  payment.  All  that  he  need  do  in  any 
case  was  to  give  ample  notice  promptly  according  to  the  circum- 
stances and  the  usage  of  the  business,  and  unless  the  position  of 
the  party  receiving  the  money  had  been  altered  for  the  worse 
in  the  meantime  the  date  of  the  notice  was  not  material.  Iron 
City  Nat.  Bank  v.  Fort  Pitt  Nat.  Bank,  159  Pa.  St.  46,  52.  As 
to  other  cases  on  this  subject  see  People's  Bank  v.  Franklin  Bank, 
88  Tenn.  299 ;  First  Nat.  Bank  of  Danvers  v.  First  Nat.  Bank  of 
Salem,  151  Mass.  280;  Nat.  Bank  of  North  America  v.  Bangs, 
106  Mass.  441;  Ellis  v.  Insurance  Company,  4  Ohio  St.  2G8; 
First  Nat.  Bank  v.  Kicker,  71  111.  439;  Rouvant  v.  San  Antonio 
Nat.  Bank,  63  Tex.  610;  Deposit  Bank  of  Georgetown  v.  Fayette 
Nat.  Bank,  90  Ky.  10.  Acceptance  admits  the  signature  of  the 
drawer,  but  is  no  proof  or  admission  of  the  indorsement  by  the 
payee,  whether  the  bill  be  payable  to  the  drawer's  own  order  or 
that  of  another  person.  Williams  v.  Drexel,  14  Md.  566.  And  the 
drawee  is  not  presumed  to  know  the  handwriting  in  the  body 
of  the  instrument.  Continental  Nat.  Bank  v.  Tradesman's  Bank, 
36  App.  Div.  (N.  Y.)  112;  Gunston  v.  Heat  and  Power  Co.,  181 
Pa.  St.  327. 

(c)  Thus,  if  the  bill  is  drawn  by  a  corporation,  he  cannot  set 
up  as  a  defense  that  it  was  without  legal  capacity  to  draw  the  bill. 
Halifax  v.  Lyle,  3  Welsby,  H.  &  G.  446.  So,  if  the  bill  is  drawn 
by  an  infant,  Jones  v.  Darch,  4  Price,  300;  Taylor  v.  Croker,  4 
Esp.  187;  or  a  married  woman,  Cowton  v.  Wickersham,  54  Pa. 
St.  302. 

(d)  The  delivery  of  a  bill  or  check  by  one  person  to  another  for 
value  implies  a  representation  on  the  part  of  the  drawer  that  the 
drawee  is  in  funds  for  its  payment,  and  the  subsequent  accept- 
ance of  such  check  or  bill  constitutes  an  admission  of  the  truth 
of  the  representation,  which  the  drawer  is  not  allowed  to  retract. 
By  sTich  acceptance  the  drawee  admits  the  truth  of  the  representa- 
tion, and  having  obtained  a  suspension  of  the  holder's  remedies 
against  the  drawer,  and  an  extension  of  credit  by  his  admission, 
is  not  afterward  at  liberty  to  controvert  the   fact  as  against  a 


LIABILITY    OF    PARTIES.  83 

bona  fide  holder  for  value  of  the  bill.  Heuertematte  v.  Morris, 
101  N.  Y.  63,  70.  If  the  acceptance  be  for  the  drawer's  accommo- 
dation the  acceptor  does  not  thereby  become  entitled  to  sue  the 
drawer  upon  the  bill;  but  when  he  has  paid  the  bill,  and  not 
before,  he  may  recover  back  the  amount  from  the  drawer  in  an 
action  for  money  had  and  received.  Christian  v.  Keen,  80  Va. 
369,  377.  See  also  Whitwell  v.  Brigham,  19  Pick.  117;  Hender- 
son V.  Thornton,  37  Miss.  448;  Suydam  i^.  Combs,  3  Green 
(N.  J.),  133. 

(e)  Thus,  he  would  not  be  permitted  to  show  that  the  payee 
at  the  time  of  the  acceptance  was  a  lunatic.  Smith  v.  Marsack, 
6  C.  B.  486. 

§  113.  When  person  deemed  indorser. —  A  person  plac- 
ing his  signature  upon  an  instrument  otherwise  than  as 
maker,  drawer  or  acceptor  is  deemed  to  be  an  indorser,  un- 
less he  clearly  indicates  by  appropriate  words  his  intention 
to  be  bound  in  some  other  capacity  (a). 

(a)  See  section  36,  subdivision  6,  and  note.  There  is  nothing 
in  cither  section  to  preclude  a  party  from  assuming  liability  such 
as  guarantor,  etc.  Thus,  if  he  were  to  place  above  his  signature 
the  words,  "  I  guarantee  the  payment  of  the  within  note,"  he 
would  not  be  deemed  an  indorser  but  a  guarantor.  Where  the 
statute  fixes  the  status  of  a  party  to  a  negotiable  instrument  as 
being  that  of  an  indorser,  parol  evidence  is  not  admissible  to 
vary  such  status.  Baumeister  v.  Kuntz.  42  So.  886  (Fla.). 
Under  this  section  a  partner,  by  individually  indorsing  a  firm 
note  adds  to  his  liability  as  maker  a  several  and  distinct  liability 
as  indorser.  Nat.  Exchange  Bank  v.  Lubrano  (R.  I.),  68  Atl. 
Rep.  944.     See  note  to  section  114. 

§114.  Liability  of  irregular  indorser. —  Where  a  person, 
not  otherwise  a  party  to  an  instrument.  ])laccs  tliereon  his 
signature  in  blank  before  delivery,  he  is  lial)le  as  indorser  •yjA'*'*'^'*'**^ 
in  accordance  with  the  following  rules:  ^(Xr^* 

I.   If  the  instrument  is  payable  to  the  order  of  a  third 
person,  he  is  liable  to  the  payee  and  to  all  subsequent  parties. 


4^ 


>^^^-^ 


84  THE    NEGOTIAULE    liNSTRUMENTS    LAW. 

J.  li  ilic  instrument  is  payable  to  the  order  of  the  maker 
or  drawer,  or  is  payable  to  bearer,  he  is  liable  to  all  parties 
subsequent  to  the  maker  or  drawer. 

3.   If  he  signs  for  the  accommodation  of  the  payee  he  is  j 
liable  to  all  parties  subsequent  to  the  payee. 

This  section  is  intended  to  cover  irregular  indorsements.     On 
this  subject  the  decisions  are  very  conflicting.     In  some  jurisdic- 
tions a  person  placing  his  signature  on  the  back  of  a  note  before 
t4ie   payee   has   indorsed    was   deemed   a   joint   maker.      Good   v. 
Martin,  95   U.   S.   93;   National  Exchange  Bank  v.   Cumberland 
Lumber   Co.,   100  Tenn.  479;   Logan   v.   Ogden,  101    Tenn.   392; 
±{ank  of  Jamaica  v.  Jefferson,  92  Tenn.  537 ;  Melton  v.  Brown,  25 
Fla.  461;  Schroeder  v.  Turner,  68  Md.  506.    In  other  jurisdictions 
he  was  regarded  as  a  guarantor.    In  still  others  he  was  considered 
an  indorser.     And  those  courts  which  held  him  to  be  an  indorsei' 
differed  as  to  whether  he  was  a  first  or  second  indorse!'.    The  rule 
adopted  in  the  statute  is  embodied  in  part  in  section  3117  of  the 
Civil   Code   of   California,   which  reads :    "  One  who   indorses  a 
negotiable  instrument  before  it  is  delivered  to  the  payee  is  liable 
to  the  payee  thereon,  as  an  indorser."     The  California  rule  was 
adopted  because  it  is  conducive  to  certainty,  and  because  it  ap- 
pears to  accord  more  nearly  with  what  must  have  been  the  inten- 
tion of  the  parties.    When  a  plain  man  puts  his  signature  on  the 
back  of  a  negotiable  instrument  he  ordinarily  understands  that 
he   is   becoming  liable  as  an   indorser;   and   if  he  puts   it  there 
before  the   instrument   is   delivered,  he   usually   does   so   for  the 
purpose  of  giving  the  maker  or  drawer  credit  with  the  payee  or 
other  person  to  whom  it  is  negotiated.     The  following  observation 
in  Connors  v.  Taylor  (13  Wis.  224,  229),  seems  to  embody  much 
practical  good  sense:    "Obviously,  a  person  indorsing  a  note  be- 
fore delivery  thereof  to  the  payee  intends  rendering  himself  liable 
to  the  payee  in  some  character  and  upon  some  ground.     He  must 
intend  and  design  to  secure  its  payment  and  give  credit  to  the 
paper  by  placing  his  name  upon   it,  even  in  the   hands   of  the 
payee."     In  many  of  the  cases  the  reasoning  is  highly  technical, 
and   the   decisions   are  based  upon  considerations   which,   in   all 
probability,   never   entered  the  heads   of  the  parties   themselves. 
The  California   Code   makes  no  provision  for  a  case  where  the 


LIABILITY    OF    PARTIES.  85 

instrument  is  drawn  to  the  order  of  the  maker  or  drawer.  This 
is  covered  by  subdivision  2,  above.  Subdivision  3  was  added  to 
provide  for  a  case  where,  the  payee  being-  unable  to  enforce  pay- 
ment, there  might  be  a  question  whether  the  indorser  would  be 
liable  to  a  person  claiming  under  the  payee. 

In  New  York  prior  to  the  statute  a  person  indorsing  in  blank 
before  delivery  to  the  payee  was  prima  facie  deemed  to  be  a 
second  indorser,  and  hence  not  liable  to  the  payee,  who  was 
supposed  to  be  the  first  indorser.  Bacon  v.  Burnham,  37  IST.  Y 
614;  Phelps  v.  Vischer,  50  N.  Y.  69.  The  same  rule  prevailed  i 
Pennsylvania.  Eilbcrt  v.  Finkbeiner,  68  Pa.  St.  243;  Central 
Nat.  Bank  v.  Dreydoppel,  134  Pa.  St.  499.  And  in  Oregon. 
Deering  v.  Creighton,  19  Oregon,  118;  Cogswell  v.  Ilayden, 
5  Oregon,  22.  But  as  the  paper  itself  furnished  only  prima, 
facie  evidence  of  this  intention,  it  was  competent  to  rebut  th 
presumption  by  parol  proof  that  the  indorsement  was  made  t 
give  the  maker  credit  with  the  paj^ee.  Coulter  v.  Richmond,  5 
N.  Y.  478.  As  the  statute  declares  the  liability  to  be  that  of  a 
indorsei,  the  holder  is  not  pennitted  to  show  that  the  party 
signing  meant  to  be  bound  as  guarantor.  A.  B.  Farquhar  Co. 
Highman  (X.  D.),  112  N.  W.  Eep.  558.'  The  statute  has  change 
the  law  in  New  York,  New  Jersey,  Ehode  Island,  Ohio,  and  othe 
States.  Far  Rockaway  Bank  v.  Norton,  186  N.  Y.  484;  Haddock, 
Blanchard  &  Co.  Inc.  v.  Haddock,  118  App.  Div.  (N.  Y.)  412; 
Wilson  V.  Ilendee  (N.  J.),  66  Atl.  Rep.  413;  Hibbs  v.  Guaraglia 
(N.  J.),  67  Atl.  Rep.  81;  Roekfield  v.  First  Nat.  Bank  of  Spring- 
field (Ohio),  83  N.  E.  Rep.  392;  Deahy  v.  Choquet  (R.  L),  67 
Atl.  Rep.  421.  And  now,  where  it  is  sought  to  hold  an  irregular 
indorser,  demand  and  notice  of  dishonor  must  be  shown  as  in 
otlior  instances.     See  cases  cited  above. 

This  section  does  not,  however,  fix  the  rights  of  the  various 
indorsers  as  between  themselves;  the  latter  liability  is  governed 
by  section  118,  under  which  evidence  is  admissible  to  show  an 
agreement  as  to  tlie  order  in  which  they  shall  bo  liable.  Had- 
dock, Blanchard  &  Co.  Inc.  v.  Haddock,  118  App.  Div.  (N.  Y.) 
412;  Kohn  v.  CV)nsolidated  Butter  &  Kgg  Co.,  30  Misc.  (N.  Y.) 
725;  Wilson  v.  Ilendec  (N.  J.),  66  Atl.  Rep.  413.  In  the  case 
last  cited,  it  was  said  by  the  Court  of  Errors  and  A])peals  of 
Now  Jersey:  "If  will  Ik*  observed  that  this  section  deals  with 
the   rights    of    tin-    payee    and    subsequent   parties,    and    has    not 


'f 


86  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

the  effect  of  defining  the  rights  and  liabilities  of  several  irregu- 
lar iiulorsers  as  between  themselves.  These  are  set  forth  in 
soition  08,  which  reads  as  follows:  'As  respects  one  another, 
iiulorsers  are  liable  prima  facie  in  the  order  in  which  they 
indorse;  but  evidence  is  admissible  to  show  that  as  between 
or  among  themselves  they  had  agreed  otherwise,'  etc.  This  does 
not,  by  express  mention,  sanction  parol  evidence;  neither  does  it 
expressly  exclude  any  kind  of  evidence,  whether  written  or  verbal. 
Is  parol  evidence  excluded  by  implication?  If  the  legislative 
design  was  to  admit  only  written  evidence  for  the  purpose  indi- 
cated, it  would  have  been  unnecessary  to  say  anything  upon  the 
subject,  for  by  the  common-law  rules  of  evidence  other  writings 
explanatory  of  the  real  agreement  would,  of  course,  have  been 
admissible.  When  we  recall  that  a  previous  section  had  brought 
irregular  and  regular  indorsers  into  a  single  category  in  the  ab- 
sence of  an  expressed  intention  to  the  contrarj^  that  the  first 
clause  of  section  08  renders  the  mere  act  of  indorsement  only 
prima  facie  evidence  of  the  contract  as  between  successive  in- 
dorsers, and  that  by  i^rcvious  decisions  parol  evidence  as  between 
irregular  indorsers  was  for  all  purposes  admissible,  and  as  be- 
tween regular  indorsers  was  for  some  purposes  admissible  and 
for  other  purposes  not,  it  is  easy  to  arrive  at  the  conclusion  that 
the  section  was  intended  to  admit  parol  evidence  m  all  cases 
between  indorsers  for  the  purpose  of  showing  what  was  the 
agreement  amongst  themselves.  This  view  brings  our  State  into 
accord  with  the  rule  already  laid  down  in  some  other  jurisdic- 
tions as  the  common-law  rule.  At  the  same  time  it  does  not 
destroy  the  value  of  the  instrument  as  a  commercial  instrument, 
for  it  is  not  against  those  who  subsequently  take  the  instrument 
in  the  course  of  commerce  that  the  explanatory  evidence  is 
admitted.  Wlicn  we  remember  that  the  rules  of  the  law  merchant 
in  this  regard  were  established  especially  for  the  protection  of 
subsequent  holders  of  the  instrument,  and  that  the  liability  of 
indorser  arisc^s  not  from  any  words  expressed  upon  the  paper 
but  from  implications  that  originated  in  the  necessities  of  trade 
and  commerce,  it  is  reasonable  to  attribute  to  the  Legislature  an 
intent  to  leave  the  paper  open  to  explanation  by  parol  as  between 
the  indorsers  themselves."  Wilson  v.  Hendee  (N.  J.),  66  Atl. 
Rep.  413,  416. 


LIABILITY    OF    PARTIES.  8/ 

So,  in  Haddock,  Blanchard  &  Co.  Inc.  v.  Haddock,  118  App. 
Div.  (N.  Y.)  412,  it  was  said :  "  The  section  does  not  purport  to 
define  the  liability  of  one  indorser  to  another.  That  matter 
is  governed  entirely  by  section  118.  The  two  sections  read  well 
together,  one  as  showing  the  position  of  the  parties  while  the 
paper  is  with  the  public  as  a  negotiable  instrument;  the  other 
as  defining  the  rights  of  the  indorserg  as  between  themselves 
where  the  negotiable  character  of  the  instrument  is  unimport- 
ant." And  it  has  been  held  that  under  this  section  an  in- 
dorser who  signed  for  the  accommodation  of  the  maker,  before 
the  paper  was  indorsed  by  the  payee,  may  defend  upon  the  ground 
of  invalidity,  or  want  of  consideration,  in  the  same  way  that  the 
maker  could  do,  if  the  action  were  against  him.  Leonard  v. 
Draper,  187  Mass.  536. 

Illustrations. 

Note  made  by  A  payable  to  order  of  B,  indorsed  by  C,  and 
afterward  delivered  to  B.     C  is  liable  as  indorser  to  B. 

Note  made  by  A  payable  to  order  of  himself,  indorsed  by  B, 
and  afterward  delivered  to  C.    B  is  liable  as  indorser  to  C. 

Note  made  by  A  to  order  of  B,  indorsed  by  C  before  B,  but 
for  accommodation  of  B,  and  ^scounted  by  Kank  of  X.  C  is 
liable  as  indorser  to  Bank  of  X  and  not  to  B. 

§  115.  Warranty  where  negotiation  by  delivery,  et  cetera. 
—  Every  person  negotiating  an  instrument  by  delivery  or 
by  a  qualified  indorsement,  warrants  (a)  : 

1.  That  the  instrumfent  is  genuine  (b)  and  in  all  respects 
what  it  purports  to  be  (c)  ; 

2.  That  he  has  a  good  title  to  it  (J)  ; 

3.  That  all  pri^or  parties  had  capacity  to  contract  (c)  ; 

4.  That  he  has  no  knowledge  of  any  fact  which  would 
impair  the  validity  of  the  instrument  or  render  it  value- 
less (/). 

Rut  when  tlie  negotiation  is  by  delivery  onlv,  the  war- 
ranty extends  in  favor  of  no  holder  other  tliaii  tlic  imme- 
diate transfereej  The  provisions  of  subdivision  three  of  this 


88  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

section  do  not  apjily  to  persons  negotiating  public  or  corpo- 
rate securities,  other  than  bills  and  notes  {g). 

{a)  This,  of  course,  refers  only  to  the  implied  warranty.  An 
express  warranty  may  be  so  framed  as  to  exclude  all  other  war- 
ranties which  would  othenvise  be  implied  by  the  law.  Giffert  v. 
West,  37  Wis.  115. 

(6)  Littauer  v.  Goldman,  72  N.  Y.  50G;  Whitney  v.  National 
Bank  of  Potsdam,  45  N.  Y.  303;  Ilerrick  v.  Whitney,  15  Johns. 
240;  Canal  Bank  v.  Bank  of  Albany,  1  Hill,  287;  Coolidge  v. 
Brigliam,  5  Mete.  68.  But  if  at  the  time  of  the  transfer  he  ex- 
pressly decline  to  warrant  the  genuineness  of  the  instrrmient  no 
such  warranty  will  be  implied.  Bell  v.  Dagg,  60  N.  Y.  528.  But 
a  general  refusal  to  guarantee  will  not  of  itself  exclude  the  im- 
plied warranty  of  genuineness.  (Id.)  The  sale  and  transfer, 
for  a  full  and  fair  price,  of  a  note  past  due,  indorsed  in  blank 
by  the  person  to  whose  order  it  is  payable,  implies  a  warranty  by 
the  vendor  that  such  indorsement  is  valid.  Giffert  v.  West,  37 
Wis.  115.     See  next  section. 

(c)  It  will  be  noted  that  the  warranty  mentioned  in  the  next 
section,  that  the  instrument  is  valid,  is  omitted  from  this  section. 
The  inference  from  such  omission  is,  that  a  person  negotiating 
commercial  paper  by  delivery  merely,  or  by  a  qualified  indorse- 
ment, does  not  warrant  that  it  is  an  enforcible  contract,  as,  for 
example,  that  it  is  not  void  for  usury.  This  was  the  New  York 
rule  (Littauer  v.  Goldman,  72  N.  Y.  506),  and  while  it  has  been 
criticized  and  disapproved  by  the  Supreme  Court  of  the  United 
States  (Meyer  v.  Richards,  163  U.  S.  385)  it  seems  to  be  the  more 
convenient  rule  in  practice.  The  contrary  rule  would  often  work 
great  hardship,  and  would  make  the  business  of  dealing  in  com- 
mercial paper  extremely  hazardous.  A  broker,  for  example, 
buying  and  selling  notes  and  bills,  may  assure  himself  that  an 
instrument  is  genuine,  and  that  the  parties  had  capacity  to  con- 
tract, but  he  could  not  always  know  the  circumstances  under 
which  the  paper  was  made.  On  the  other  hand,  the  New  York 
rule  which  is  conceived  to  be  the  rule  of  the  statute,  docs  no 
injury  to  the  purchaser;  for  if  he  desires  a  warranty,  he  has  only 
to  exact  it,  or  to  require  the  indorsement  of  the  seller  (see  sec. 
117). 

(d)  Meriden  National  Bank  v.  Gallaudet,  120  N.  Y.  298,  303. 

(e)  Littauer  v.  Goldman,  72  N.  Y.  506,  509. 


LIABILITY    OF    PARTIES.  89 

(/)  Thus,  if  he  has  knowledge  that  the  paper  is  void  for  usury, 
he  will  be  liable  to  the  purchaser.  Littauer  v.  Goldman,  72  N.  Y. 
506.  But  in  such  case  scienter  must  be  alleged  and  proved.  (Id.) 
Compare  Meyer  v.  Richards,  1(53  U.  S.  385;  Wood  v.  Sheldon, 
42  N.  J.  Law,  425. 

(g)  Otis  V.  CuUum,  92  U.  S.  448.  This  was  an  action  against 
the  vendor  of  municipal  bonds  payable  to  bearer,  which  were 
afterward  declared  void  because  the  legislature  had  no  power  to 
pass  the  acts  under  which  they  were  issued.  It  was  held  that  no 
recovery  could  be  had  in  the  absence  of  an  express  warranty. 
The  application  of  the  rule  of  commercial  paper  in  such  cases 
would  work  great  hardship  and  much  public  inconvenience. 

§  116.  Liability    of    general    indorser. —  Every    indorser 
who  indorses  without  qualification,  (a)  warrants  to  all  sub 
sequent  holders  (b)  in  due  course: 

1.  The  matter  and  things  mentioned  in  subdivisions  one, 
two  and  three  of  the  next  preceding  section  (c)  ;  and 

2.  That  the  instrument  is  at  the  time  of  his  indorsement 
valid  a'ld  subsisting  (d). 

And,  in  addition,  lie  engages  that  on  due  presentment,  it 
shall  be  accepted  or  paid,  or  both,  as  the  case  may  be,  ac- 
cording to  its  tenojf  (c),  and  thai  if  it  be  dishonored,  and 
the  necessary  proceedings  on  dishonor  be  duly  taken,  he  will 
pay  the  amount  thereof  to  the  holder,  or  to  any  subsequent 
indorser  who  may  be  compelled  to  pay  it  (/). 

(a)  As  this  and  the  preceding  section  include  the  case  of  every 
indorser,  the  warranty  as  to  genuineness  will  apply  to  one  to  whom 
the  paper  has  been  indorsed  restrietivcly,  as  for  example,  where 
the  indorsement  is  "  for  collection."  This  undoubtedly  changes 
the  law;  for  the  former  rule  was  that  the  indorsement  of  a  bank 
to  which  paper  had  been  indorsed  "for  collectifni  "  did  not  im- 
port a  guaranty  of  the  genuineness  of  all  prior  indorsements,  but 
only  of  the  agent's  relation  lo  the  principal  as  stated  upon  the 
face  of  the  paper;  and  it  was  held  that,  in  such  a  case,  the  col- 
lecting bank  was  not  liable  after  it  had  paid  the  proceeds  to  its 
principal,   though    a   prior   indorsement   was   a    forgery.     United 


90  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

States  V.  Anu-ricau  Kxeliaiige  Nat.  Bank,  70  Fed.  Kep.  232;  Nat. 
Tark  Bank  v.  Seaboard  Nat.  Bank,  114  N.  Y.  2S.  But  this  rulo 
was  exeeediugly  iueoiivenieut  iu  praetiee,  and  hence  it  was 
deemed  expedient  to  make  every  indorser  a  warrantor  of  genuine- 
ness. There  is  no  hardship  in  this  rule,  for  each  indorser  has  a 
right  of  recourse  against  all  prior  parties.  The  former  rule,  how- 
ever, introduceil  such  an  element  of  uncertainty  that  the  clearing- 
house associations  throughout  the  country  adopted  rules  to  ob- 
viate its  effects,  and  the  bankers  sent  letters  to  their  customers 
requesting  that  they  discontinue  the  use  of  the  indorsement  "  for 
deposit,"  "for  collection,'"  etc.  In  this,  as  in  several  other  in- 
stances where  the  law  was  changed,  the  needs  of  the  business 
community  were  deemed  of  more  importance  than  technical  prin- 
ciples. 

(t)  Under  this  section,  as  under  the  rule  of  the  law  merchant, 
the  warranty  is  in  favor  of  subsequent  holders  only,  and  since  the 
adoption  of  the  statute,  as  well  as  before,  the  indorser  does  not 
warrant  to  the  drawee  that  the  signature  of  the  drawer  is  genu- 
ine. Farmers'  and  Merchants'  Bank  v.  Bank  of  Rutherford,  115 
lenn.  64,  70-71.  Thus,  if  a  check  purporting  to  be  drawn  by  A 
should  be  indorsed  by  B  and  cashed  by  C,  the  indorsement  of  B 
would  be  a  warranty  in  favor  of  C,  but  not  in  favor  of  the  bank 
on  which  the  check  is  drawn. 

(c)  Leonard  v.  Draper,  187  Mass.  536.  This  is  so,  though  he 
is  an  accommodation  indorser,  and  the  fact  was  known  to  the 
holder  when  he  took  the  instrument.  Packard  v.  Windholz,  88 
App.  Div.  (N.  Y.)  365,  aff'd  180  N.  Y.  549;  Oriental  Bank  v. 
Gallo,  112  App.  Div.  360.  The  provision  of  the  statute  refers  to 
the  condition  of  the  instrument  on  leaving  the  hands  of  the 
indorser,  and  hence,  if  the  paper  should  be  altered  after  that 
time,  and  before  delivery,  there  is  no  warranty.  First  Nat.  Bank 
V.  Gridley,  112  App.  Div.  (N.  Y.)  398.  Thus,  where  a  note 
payable  to  the  order  of  several  payees  jointly,  was  indorsed  by  one 
of  them,  and  forwarded  by  mail  to  the  maker,  who,  before  nego- 
tiating the  instrument,  erased  the  word  "jointly,"  and  struck 
out  the  name  of  one  of  the  payees,  and  inserted  his  own  in  place 
thereof,  it  was  held  that  the  mdorger  was  not  liable.  (Id.')  The 
indorsement  of  a  promisaory  note  is  a  guaranty  by  the  indorser 
to  the  indorsee  that  the  prior  indorsements  on  the  note  and  the 
signature  of  the  payor  are  genuine,  and  made  by  parties  author- 


LIABILITY    OF    PARTIES.  9I 

Ized  to  pass  the  title.  MeConeghy  v.  Kirk,  68  Pa.  St.  200; 
Condon  v.  Pearce,  43  Md.  83;  Lambert  v.  Pack,  1  Salk.  127; 
Critchlow  V.  Parry,  2  Camp.  182;  Pregcott  Bank  v.  Caverly,  7 
Gray,  216,  220.  Thus  one  who  indorses  a  promissory  note,  pur- 
porting to  be  executed  by  a  firm,  thereby  impliedly  contracts  that 
the  note  was  made  by  the  firm  in  whose  name  it  is  executed,  and 
he  cannot  dispute  the  fact  in  an  action  upon  the  indorsement. 
Dalrymple  v.  Hillenbrand,  62  N.  Y.  5  And  a  second  indorser 
cannot  dispute  the  legal  capacity  of  the  payee  to  indorse  on  the 
ground  that  she  was  a  married  woman.  Prescott  Bank  v.  Cav- 
erly, 7  Gray,  216,  217.  So,  one  indorsing  the  note  of  a  corjwra- 
tion  admits  its  capacity  to  execute  the  note.  Glidden  v,  Cham- 
berlin,  167  Mass.  486.  But  see  Southern  Loan  Co.  v,  Morris, 
2  Pa.  St.  175. 

(d)  Thus,  whether  a  promissory  note  made  on  the  Lord's  Day 
can  be  enforced  by  a  payee  against  the  maker  is  immaterial  in  a 
suit  by  the  indorsee  against  the  indorser.  as  the  latter  always 
warrants  the  existence  and  legality  of  the  contract  which  he 
undertakes  to  assign.  Prescott  National  Bank  v.  Butler,  157 
Mass.  548. 

(e)  An  indorser  of  a  promissory  note  which  contains  a  stipula- 
tion for  a  reasonable  attorney's  fee  in  case  of  suit  is  as  much 
liable  for  the  attorney's  fee  as  for  the  principal  of  the  note. 
Benn  v.  Kutzschan,  24  Ore.  28.     See  section  21. 

(f)  The  indorser  has  no  right  to  require  the  holder  to  sue  the 
maker  or  drawer,  under  the  penalty  of  the  indorser  being  dis- 
charged in  case  of  non-compliance;  and  it  is  his  duty  to  take  up 
the  note.  Day  v.  Pidgway,  17  Pa.  St.  .303.  Nor  is  the  holder 
bound  to  anticipate  and  make  provision  for  a  breach  of  the  con- 
tiact.  Bartlett  v.  Ts])ell,  31  Conn.  207.  Parol  evidence  of  an 
agreement  which  would  vary  the  legal  liability  of  the  indorser 
under  his  indorsement  is  inadmissible.  Smith  v.  Cam,  0  Ore. 
278;  Eaton  r.  MeMahon,  42  Wis.  484.  And  while  there  has  been 
some  conflict  in  the  decisions,  the  sounder  doctrine  puts  all  in- 
dorsements on  snljStantially  the  same  footing.  The  contract  by 
a  blank  indorsement  is  fixed  by  law,  and  should  not  bo  rendered 
uncertain  by  parol,  any  more  than  when  written  out  in  full. 
Charles  v.  Denis.  42  Wis.  56,  58;  Torbert  v.  Montague,  38  Colo. 
325.  This  is  the  rule  adopted  in  the  statute,  which  makes  the 
indorser's  obligatirn  absolute.  Exeeutors  have  t>o  power  to  bind 
the  o<Ttato  of  the  testator  by  a  eontraet  of  indorsement.  Packard 
V.  Dunfee,  119  App.  Div.   (N.  Y.)  .599. 


g2  THE   NEGOTIAULE  INSTRUMENTS   LAW. 

§  117.  Liability  of  indorser  where  paper  negotiable  by 
delivery. — ■Where  a  person  places  his  indorsement  on  an 
instrument  negotiable  by  delivery  he  incurs  all  the  liabilities 
of  an  indorser  (a). 

(a)  Cover  v.  Meyers,  75  Md.  40G.  The  holder  of  paper  payable 
to  bearer  and  indorsed  may  sue  upon  it  as  bearer  or  indorsee  at 
his  election.  Daniel  on  Negotiable  Instruments,  section  663a; 
3  Kent's  Comm.  44^  Formerly  in  some  States  a  note  payable  to  a 
desijxnatcd  payee  or  bearer  could  not  be  negotiated  except  by  the  in- 
dorsement of  such  person.  See  Garvin  v.  Wiswell,  83  111.  218; 
Blackman  v.  Lehman,  63  Ala.  547. 

§  118.  Order  in  which  indorsers  are  liable. — As  respects 
one  another,  indorsers  are  liable  prima  facie  in  the  order  in 
which  they  indorse  (a)  ;  but  evidence  is  admissible  to  show 
that  as  between  or  among  themselves  they  have  agreed 
otherwise  (b).  Joint  payees  or  joint  indorsees  who  indorse 
are  deemed  to  indorse  jointly  and  severally  (c). 

(a)  This  rule  is  general,  and  applies  to  accommodation  in- 
dorsers as  well  as  to  others.  Such  indorsements  import,  not  a 
joint  but  a  several  and  successive,  liability,  each  indorser  being 
responsible  to  all  who  succeed  him.  Easterly  v.  Barber,  66  N.  Y. 
433;  Kelly  v.  Burroughs,  102  X.  Y.  93;  Egbert  v.  Hanson,  34 
Misc.  597;  McCarty  v.  Boots,  21  How.  (U.  S.)  432;  Bank  of 
U.  S.  V.  Beirne,  1  Gratt.  234;  Hague  v.  Davis,  8  Gratt.  4;  Shaw 
V.  Knox,  98  Mass.  214;  McDonald  v.  Magruder,  3  Peters,  470 
Wood  V.  Eepold,  3  Ilarrig  &  J.  125 ;  Clapp  v.  Eice,  13  Gray,  403 
Howe  V.  Merrill,  15  Gush.  88;  Talcott  v.  Cogswell,  3  Day,  512 
Kirschner  v.  Conklin,  40  Conn.  77,  81;  Wolf  v.  Hostetter,  182 
Pa.  St.  292 ;  Euss  v.  Sadler,  197  Pa.  St.  51. 

(h)  Morrison  Lumber  Co.  v.  Lookout  Mt.  Hotel  Co.,  92  Tenn. 
6;  Bank  of  Jamaica  v.  Jefferson,  92  Tenn.  537;  Eeinhart  v. 
Schall,  69  Md.  352;  Hale  v.  Danforth,  46  Wis.  554;  Witherow  v. 
Slaybach,  158  N.  Y.  649;  Patch  v.  Washburn,  82  Mass.  82; 
Breneman  v.  Furniss,  90  Pa.  St.  186.  Evidence  to  show  an  agree- 
ment for  a  joint  liability;  Easterly  v.  Barber,  66  N.  Y.  433; 
Phillips  V.  Preston,  5  How.  (U.  S.)  278;  Edelen  v.  White,  6  Bush. 


LIABILITY    OF    PARTIES.  93 

408;  contra,  Johnson  v.  Eamsay,  43  N.  J.  Law,  279.  Evidence 
to  show  contract  that  one  was  to  be  prior  indorger:  Slack  v. 
Kirk,  67  Pa.  St.  380;  Reinhart  v.  Schall,  69  Md.  352;  Slagel  v. 
Rust,  4  Gratt.  274.  The  agreement  may  be  evidenced  by  the 
circiimstances  of  the  case.  Macdonald  v.  Whitfield,  L.  R.  8  App, 
Cas.  733;  Hagerthy  v.  Phillips,  83  Me.  336;  Clapp  v.  Rice,  13 
Gray,  403.  For  a  case  where  relief  given  in  equity  where  order 
of  indorsers  changed  on  renewal  of  note  without  consent  of  one; 
see  Slagel  i-.  Rusts'  Admr.,  4  Gratt.  274.  The  statute  has  changed 
the  law  in  New  Jersey.  Morgan  v.  Thompson,  72  X.  J.  Law,  244 
246. 

(e)  This  provision  changes  the  law.  Prior  to  the  statute  joint 
payees  who  indorsed  were  liable  only  jointly.  Lane  v.  Stacy,  8 
Allen,  41;  Daniel  on  Negotiable  Instruments,  section  704. 

§  iig.  Liability  of  agent  or  broker. —  Where  a  broker  or 
other  agent  negotiates  an  instrument  without  indorsement, 
he  incurs  all  the  liabilities  prescribed  by  section  one  hundred 
and  fifteen  of  this  act,  unless  he  discloses  the  name  of  his 
principal,  and  the  fact  that  he  is  acting  only  as  agent  (a). 

(a)  Meriden  National  Bank  v.  Gallaudet,  120  N.  Y.  289 ;  Cabot 
Bank  v.  Morton,  4  Gray,  156 ;  Worthington  v.  Cowles,  12  Mass.  30. 


iJ4  THE    NEGOTIABLE   INSTRUMENTS   LAW. 

ARTICLE  VII. 
Presentment  for  Payment. 

Section  130.   Effect  of  want  of  demand  on  principal  debtor. 

131.  Presentment  where  instrument  is  not  payable 

on  demand. 

132.  \\'hat  constitutes  a  sufficient  presentment. 

133.  Place  of  presentment. 

134.  Instrument  must  be  exhibited. 

135.  Presentment    where    instrument    payable    at 

bank. 

136.  Presentment  where  principal  debtor  is  dead. 

137.  Presentment  to  persons  liable  as  partners. 

138.  Presentment  to  joint  debtors. 

139.  When  presentment  not  required  tO'  charge  the 

drawer. 

140.  \\'hen  presentment  not  required  to  charge  the 

indorser. 

141.  When  delay  in  making-  presentment  is  excused. 

142.  When  presentment  may  be  dispensed  with. 

143.  When  instrument  dishonored  by  non-payment. 

144.  Liability  of  person  secondarily  liable,  when  in- 

strument dishonored. 

145.  Time  of  maturity. 

146.  Time ;  how  computed. 

147.  Rule  where  instrument  payable  at  bank, 

148.  \\'hat  constitutes  payment  in  due  course. 

§  130.  Effect  of  want  of  demand  on  principal  debtor. — 
Presentment  for  payment  is  not  necessary  in  order  to  charge 
the  person  primarily  liable  on  the  instrument  (a)  ;  but  if 
the  instrument  is,  by  its  terms,  payable  at  a  special  place, 


PRESENTMENT   FOR  PAYMENT.  95 

and  he  is  able  and  willing  to  pay  it  there  at  maturity  and 
has  funds  there  available  for  that  purpose  (b),  such  ability 
and  willingness  are  equivalent  to  a  tender  of  payment  upon 
his  part  (c).  But  except  as  herein  otherwise  provided,  pre- 
sentment for  payment  is  necessary  in  order  to  charge  the 
drawer  and  indorsers  (d). 

(a)  Statute  applied  in  Farmers'  Nat.  Bank  v.  Venner,  192 
Mass.  531,  534;  Florence  Oil  Co.  v.  First  Nat.  Bank,  38  Colo. 
119.  For  the  rule  of  the  common  law  see  Wright  v.  Vermont 
Ins.  Co.,  164  Mass.  302;  Payson  v.  Whitcomb,  15  Pick.  212; 
Howard  v.  Boorman,  17  Wis.  459;  Eumbail  v.  Ball,  10  Md.  38; 
Frampton  v.  Coulson,  1  Wils.  33;  Norton  v.  Ellam,  2  M.  &  W, 
461;  Hills  v.  Place,  48  N  Y  520;  Bush  v.  Gilmore,  45  App.  Div. 
(N.  Y.)  89  The  action  itself  is  a  sufficient  demand,  and  that 
though  the  instrument  be  payable  on  demand.  The  rule  is  gen- 
eral, and  applies  though  the  maker  has  made  the  note  for  accom- 
modation and  this  is  known  to  the  holder.  Hansborough  i'.  Gray, 
3  Gratt.  340 

(6)  The  words  "  and  has  funds  there  available  for  that  pur- 
pose"  were  added  by  Laws  N.  Y.  1898,  ch.  336.  They  seem  to 
be  superfluous.  It  is  difficult  to  see  how  a  man  can  be  able  to  pay 
unless  he  has  the  funds  with  which  to  make  payment.  Besides, 
if  taken  literally,  they  impose  a  condition  not  deemed  necessary 
by  the  courts.  If,  for  example,  the  "  special  place "  where  the 
paper  is  payable  is  the  office  of  the  maker  or  acceptor,  this  pro- 
vision requires  that  he  have  the  funds  there,  and  it  would  not  be 
enough  that  he  have  them  in  bank.  The  interpolation  is  not  only 
at  variance  with  the  decisions  on  the  subject,  but  is  contrary  to 
good  sense,  and  to  the  practice  of  the  business  world.  The 
change  was  made  upon  the  suggestion  of  the  Commissioners  of 
Statutory  Revision  without  the  knowledge  of  the  Commissioners 
on  Uniformity  of  Laws.  It  affords  a  good  illustration  of  the  ab- 
surdities likely  to  result  from  legislative  "tinkering." 

(c)  The  rule  adopted  generally  in  the  United  States  is  thnf 
where  a  note  is  made  payable  at  a  pnrticular  liaiik  or  other  place, 
or  a  hill  of  exchange  is  drawn  or  accepted  payable  in  like  maimer, 
it  is  not  ne^-essarj'  in  order  to  recover  of  the  maker  or  acceptor 
tu  uvcr  ur  prove  presentment  or  demand  of  payment  at  such  place 


96  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

on  the  day  the  insrtrunient  hecarae  due  or  afterward.  The  only 
fonsequenre  of  a  failure  to  make  such  presentment  is  that  the 
maker  or  acceptor,  if  he  was  ready  at  llie  time  and  place  to  make 
the  payment,  may  plead  the  matter  in  bar  of  damages  and  costs. 
Hills  V.  Place,  48  N.  Y.  520,  523;  Parker  v.  Stroud,  98  N.  Y. 
379,  384;  Cox  v.  National  Bank,  100  U.  S.  713;  Wallace  v.  Mc- 
Connell,  13  Peters,  13G;  Lazier  v.  Iloran,  55  Iowa  77;  Insurance 
Company  v.  Wilson,  29  W.  Va.  543;  Lockwood  v.  Crawford,  18 
Conn.  3G1;  Bond  v.  Storrs,  13  Conn.  410. 

(d)  Where,  by  the  terms  of  the  instrument,  the  holder  has  the 
option  to  declare  the  principal  sum  due  upon  default  in  the  pay- 
ment of  interest  he  must  prove  presentment  and  notice  in  order 
to  hold  an  indorser.  Galbraith  v.  Shepard,  43  Wash.  698.  Where 
a  draft  is  drawn  in  another  State,  by  one  residing  there,  upon  a 
person  residing  in  New  York,  any  legal  question  in  reference  to 
presentation  and  demand  for  payment  is  to  be  determined  by  the 
laws  of  New  York.  Sylvester  v.  Crohan,  138  N.  Y.  494;  Hibernia 
Bank  v.  Lacomb,  84  N.  Y.  367.  As  to  presentment  of  a  bill 
drawn  in  New  York  upon  a  person  doing  business  in  a  foreign 
country,  see  Amsinck  v.  Rogers,  189  N.  Y.  252.  The  indorser 
is  entitled  to  demand  and  notice  notwithstanding  he  holds  col- 
lateral security.     Whitney  v.  Collins,  15  E.  I.  44. 

§  131.  Presentment  where  instrument  is  not  payable  on 
demand. —  Where  the  instrument  is  not  payable  on  demand, 
,         presentment  must  be  made  on  the  day  it  falls  due   (a). 
^y  \\'here  it  is  payable  on  demand,  presentment  must  be  made 

within  a  reasonable  time  after  its  issue  (b),  except  that  in 
case  of  a  bill  of  exchange,  presentment  for  payment  will  be 
sufficient  if  made  within  a  reasonable  tiine  after  the  last 
negotiation  thereof  (c). 

(a)  As  to  date  of  maturity,  see  section  145, 

(h)  Turner  v.  Iron  Chief  Mining  Co.,  74  Wis.  355;  Mudds  v. 
HarjTer,  1  Md.  110.  This  provision  changed  the  law  of  New  York, 
which  prior  to  the  statute  was,  that  a  promissory  note  payable  on 
demand  with  interest  was  a  continuing  security,  on  which  an 
indorser  remained  liable  until  an  actual  demand,  and  the  holder 
was  not  chargeable  with  neglect  for  omitting  to  make  such  de- 


PRESENTMENT   FOR  PAYMENT.  97 

mand  within  any  particular  time.  Merritt  v.  Todd,  23  N.  Y. 
28 ;  Pardee  v.  Fish,  60  N.  Y.  265 ;  Herrick  v.  Wolverton,  41  N.  Y. 
581 ;  Wheeler  v.  Warner,  47  N.  Y.  519 ;  Crim  i'.  Starkweather,  88 
N.  Y.  339 ;  Parker  v.  Stroud,  98  N.  Y.  379,  385 ;  Shutts  v.  Fingar, 
100  X.  Y.  541.  The  object  intended  to  be  accomplished  by  the 
statute  was  to  do  away  with  the  distinction  between  notes,  or 
bills,  payable  on  demand,  which  Merritt  v.  Todd  had  created,  and 
to  leave  the  question  of  their  reasonable  presentment  for  pay- 
ment, in  order  to  charge  the  parties  to  them,  as  one  for  the  deter- 
mination of  the  court  upon  the  facts.  Commercial  Nat.  Bank  v. 
Zimmerman,  185  N.  Y.  310.  In  Connecticut,  prior  to  the  Nego- 
tiable Instruments  Law,  promissory  notes  payable  on  demand 
were  required  to  be  presented  within  four  months.  Connecticut 
General  Statutes,  p.  405.  But  the  later  statute  restores  the  rule 
of  the  common  law  as  it  formerly  existed  in  that  State.  Hamp- 
ton r.  Miller,  78  Conn.  267,  271-272.  A  similar  rule  exists  in 
California  (Civil  Code,  section  3248),  and  in  Minnesota  (Min- 
nesota statutes  [1891],  section  2104).  In  Vermont  demand  notes 
are  overdue  in  sixty  days.  Paine  v.  Central  Vermont  E.  E,  Co., 
118  U.  S.  152.  And  this  was  formerly  the  rule  in  Massachusetts. 
{Id.)  As  to  a  note  payable  on  demand,  "with  interest  semi- 
annually," see  Hayes  v.  Werner,  45  Conn.  252. 

One  of  the  most  difficult  questions  presented  for  the  decision 
of  a  court  is,  what  shall  be  deemed  a  reasonable  time  within 
which  to  demand  payment  of  the  maker  of  a  note  payable  on 
demand,  in  order  to  charge  the  indorser.  It  depends  upon  so 
many  circumstances  to  determine  what  ia  a  reasonable  time  in  a 
particular  case,  that  one  decision  goes  but  little  way  in  estab- 
lishing a  precedent  for  another.  Seavor  v.  Lincoln,  21  Pick.  267. 
If  the  facts  are  disputed  and  the  testimony  conflicting,  the  ques- 
tion is  a  mixed  one  of  law  and  fact,  to  be  decided  by  the  jury, 
under  the  instructions  of  the  court,  but  where  the  facts  are  not 
in  dispute  the  question  is  one  of  law.  Commercial  Nat.  Bank  v. 
Zimmerman.  185  N.  Y.  310;  C.erman  Am.  Bank  v.  Mills,  99  App. 
Div.  (N.  Y.)  312;  Cuild  v.  Goldsmith,  9  Fla.  212. 

As  by  section  26  an  iiistruiiniit  negotiatcl  wlion  overdue  is 
payable  on  demand,  tbe  retiuirement  of  section  1:51  is  applicable 
in  such  cases.  In  theory  paper  indorsed  when  overdue  is 
ecinivalent  to  a  bill  of  exchange  drawn  on  the  party  primarily 
liable,  payable  at  sight.     In  this  theory  the  necessity  of  demand 

7 


98  THE   NEGOTIAiiLE   INSTRUMENTS   LAW. 

and  notice  is  an  ossential  eleiiicut;  not  notice  on  a  given  Jay, 
as  in  the  case  of  a  maturing  note,  possible  in  that  case,  but 
impossible  in  the  other,  for  the  day  appointed  by  the  former 
maker  and  llie  new  acceptor  has  passed;  but  notice  after  the 
holder  has  had  reasonable  time  to  make  the  demand  on  the 
maker,  and  has  employed  that  time  with  diligence.  Tyler  v 
Young,  30  Pa.  St.  143,  144;  Leidy  v.  Tammany,  9  Watts,  353; 
Guild  v.  Goldsmitli,  9  Fla.  212.  In  the  case  of  a  negotiable  cer- 
tificate of  deposit  there  is  much  reason  for  saying  that  the  parties 
do  not  contemplate  an  immediate  demand  of  payment,  and  hence 
an  indorsee  may  not  be  held  to  the  same  degree  of  diligence  in 
presenting  it  for  payment  as  the  law  requires  in  other  cases. 
Lindsel  v.  McClellan,  18  Wis.  481.  A  note,  presented  in  accord- 
ance with  the  request  or  assent  of  the  indorser,  is,  as  to  him,  pre- 
sented in  a  reasonable  time.  Oley  v.  Miller,  74  Conn.  304,  308. 
A  note  payable  "  oii  demand  after  date "  is  a  demand  note,  and 
not  one  payable  on  a  fixed  day,  and  hence,  it  need  only  be  pre- 
sented for  payment  within  a  reasonable  time.  Schlesinger  v. 
Schultz,  110  App.  Div.  (N.  Y.)  356.  Where  a  note  is  payable 
"on  demand  and  upon  security  given,"  the  making  of  a  demand 
accompanied  by  a  tender  of  the  securities  is  not  a  condition 
precedent  to  the  maintenance  of  an  action  to  recover  upon  the 
note,  but  it  is  sufficient  for  the  plaintiff  to  produce  and  tender 
the  note  and  the  securities  upon  the  trial.  Spencer  v.  Drake,  84 
App.  Div.  (X.  Y.)  272.  As  to  corporate  bonds  and  coupons,  see 
Williamsport  Gas  Co.  v.  Pinkerton,  95  Pa.  St.  62. 

The  defense  that  the  paper  was  not  presented  within  a  leason- 
able  time  after  its  issue  need  not  be  specially  pleaded  by  an  in- 
dorser; for,  since  the  obligation  of  the  indorser  is  conditional 
upon  all  the  steps  having  been  taken  by  the  holder  which  the 
statute  has  prescribed  as  to  presentment  and  as  to  notice  of 
non-payment,  the  burden  is  on  the  holder  to  prove  due  and 
timely  presentment.  Commercial  Nat.  Bank  v.  Zimmerman,  185 
N.  Y.  210.  The  case  last  cited  overrules  German  Am.  Eank  v. 
Mills,  99  App.  Div.  (N.  Y.)  312,  315,  where  it  was  held  that  this 
section  of  the  Negotiable  Instruments  Law  creates  a  statute  of 
limitations  which  must  be  pleaded.  For  other  cases  applying  the 
statute,  see  Schlesinger  v.  Schultz,  110  App.  Div.  (N.  Y.)  356; 
Citizens'  Bank  v.  First  Nat.  Bank  (Iowa),  113  N.  W.  "Rep.  481. 

(c)  This  provision  applies  to  the  indorser  of  a  che.-k.     Colum- 
bian Banking  Co.  v.  Bowen  (Wis.)  114  N.  W.  Rep.  451.    In  the 


PRESENTMENT   FOR  PAYMENT.  99 

case  cited  the  Court  said :  "  Keeping  in  mind  that  the  discharge 
from  liability  above  referred  to  because  of  unreasonable  delay 
after  the  issuance  of  a  check  in  presenting  it  for  payment,  is  of 
the  drawer  only,  and  that  this  action  is  against  the  payee  who 
indorsed  the  in^rument  in  question  without  qualification  and  put 
it  in  circulation,  we  turn  to  section  1678-1,  which  provides,  as  to 
a  bill  of  exchange  payable  on  demand,  which  from  the  foregoing 
obviously  includes  a  check  or  draft  on  a  bank  of  the  character 
of  the  one  in  question,  '  presentment  for  payment  will  be  sufficient 
if  made  within  a  reasonable  time  after  the  last  negotiation 
thereof.'  From  the  foregoing  it  seems  plain  that,  as  regards  the 
payee  of  such  an  instrument  as  we  have  here,  who  puts  the  same 
in  circulation  with  his  unqualified  indorsement  thereon,  and  all 
subsequent  parties  thereto  so  indorsing  the  same,  presentment 
for  paj-ment  is  sufficient,  as  regards  their  liability,  if  made  within 
a  reasonable  time  after  the  last  negotiation.  A  bill  of  exchange 
payable  on  demand,  regardless  of  its  character,  put  in  circulation, 
so  long  as  its  circulating  character  is  preserved  may  be  outstanding 
■without  impairing  the  liability  of  indorsers  thereof.  Formerly, 
the  length  of  time  within  which  a  bill  of  exchange  might  circulate 
without  impairing  such  liability  was  more  or  less  uncertain, 
rendering  it  very  difficult  to  determine  any  one  case  by  the  de- 
cision in  another.  That  difficulty  was  removed,  so  far  as  prac- 
ticable, by  the  provision  that  only  the  time  need  be  considered 
intervening  between  the  last  negotiation  and  the  presentment. 
That  is  recognized  as  a  radical  change  in  the  law  as  it  formerly 
existed."  See  also  Singer  Manufacturing  Co.  v.  Summers,  143 
N.  C.  103;  Citizens  Nat.  Bank  v.  First  Nat.  Bank  (Towa), 
113  N.  W.  Rop.  481;  Plover  Savings  Bank  v.  Moodie  (Iowa), 
110  N.  W.  Rep.  29,  50.  In  the  case  last  cited  it  was  said: 
"  The  checks  were  negotiated  by  the  appellee  to  the  Des  Moines 
Savings  Bank,  and  under  the  statute  already  quoted  (Code 
Supp.  1002.  §§  3060-a-71),  reasonable  time  for  pregentation 
and  demaJnd  is  to  be  reckoned  from  the  last  negotiation  of  the 
paper.  Checks  are  an  almost  universal  suVjstituto  for  money. 
They  pasH  from  hniid  to  hiind,  liaiik  to  hank,  and  city  to  city, 
and  within  reasonable  limits,  it  may  be  said  that  no  matter  how 
long  they  remain  outstanding,  so  long  as  one  negotiation  promptly 
follows  another  and  the  checks  are  in  fait  in  eireulation  the 
statute  requires  us  to  hold  that  the  indorser  is  not  legally  pveju- 


lOO  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

d'wcd  by  the  consequent  delay  in  their  presentation  for  payment." 
Where  the  payee  neji:otiates  the  cheek  to  his  own  agent  the 
faihire  of  the  agent  to  present  the  check  is  the  payee's  own 
neglect.  Cuirdon  v.  Levine,  194  Mass.  418.  As  respects  discharge 
of  the  drawer  by  delay  in  making  presentment,  see  section  322 
and  note. 

§  132.  What  constitutes  a  sufficient  presentment. —  Pre- 
sentment for  payment,  to  be  sufficient,  must  be  made : 

1.  By  the  lnUder,  or  by  some  person  authorized  to  receive 
payment  on  his  behalf  (a)  ; 

2.  At  a  reasonable  hour  on  a  business  day  (b)  ; 

3.  At  a  proper  place  as  herein  defined  (c)  ; 

4.  To  the  person  primarily  liable  on  the  instrument,  or  if 
he  is  absent  or  inaccessible,  to  any  person  found  at  the  place 
where  the  presentment  is  made  (d). 

(a)   The  mere  possession   of  a  negotiable  instrument  which  is 
payable  to  the   order  of  the  payee,   and   is  indorsed  by  him   in 
blank,  or  of  a  negotiable  instrument  payable  to  bearer,  is  in  itself 
sufficient  evidence  of  the  right  to  present  it  and  to  demand  pay- 
ment thereof.     Weber   v.   Orton,   91    Mo.   680;    Sussex   Bank   v. 
Baldwin,   2    Ilarr.    (N.    J.)    487;    Shedd    v.    Brett,   1    Pick.   401. 
And  payment  to  such  persfon   will  always  be  valid,  unless  he  is 
known    to    the    payer    to    have    acquired    possession    wrongfully. 
Daniel    on    Negotiable   Instruments,    section    574.      There    is   no 
need  of  a  power  of  attorney  or  written  instrument  to  constitute 
one  an  agent  for  this  purpose.     Shedd  v.  Brett,  1  Pick.  401.     But 
the  mere  possession  of  an  instrument  payable  to  order  and  not 
indorsed  by  the  payee  is  not  alone  sufficient  evidence  of  the  au- 
thority of  an  assumed  agent  to  receive  payment.    Doubleday  v. 
Kress,  50  N.  Y.  410.     Where  a  bank  holding  a  note  for  collection 
sends  it  for  the  same  purpose  to  the  bank  where  it  is  payable,  the 
latter  is  authorizx'd  to  demand  payment  and  give  notice  of  dis- 
honor.    Blakesloj  r.  Ilcwett,  16  Wis.  341. 

(&)  Except  in  cases  where  the  instrument  is  payable  at  a  bank, 
the  holder  has  the  whole  day  in  which  to  present  the  same,  the 
only   limitation  being   that  he   must  present   it  at   a   reasonable 


PRESENTMENT  FOR  PAYMENT.  lOI 

hour,  and  this  may  depend  upon  the  circumstances  of  the  case. 
Salt  Springs  National  Bank  i;.  Burton,  58  N.  Y.  430;  Famsworth 
V.  Allen,  4  Gray,  453;  Barclay  v.  Bailey,  2  Camp.  527;  Wilkins  v. 
Jadis,  2  B.  &  Ad.  188.  As  late  as  nine  o'clock  in  the  evening  has 
been  held  to  be  a  reasonable  hour.  Farnsworth  v.  Allen,  4  Gray, 
453.  But  it  is  only  when  presentment  is  at  the  residence  that  the 
time  is  extended  into  the  hours  of  rest.  If  it  is  at  the  place  of 
business  it  must  be  during  those  business  hours  when  such  places 
are  customarily  open,  or,  at  least,  while  some  one  is  there  com- 
petent to  give  an  answer.  Waring  v.  Betts,  90  Va.  46,  53.  As  to 
when  instruments  payable  at  bank  must  be  presented,  see  section 
135. 

(c)   See  next  section. 

(rf)  Cromwell  v.  Hynson,  2  Camp.  596;  Phillips  v.  Astberg,  2 

Taunt.  206. 

§  133.  Place  of  presentment. —  Presentment  for  payment 
is  made  at  the  proper  place. 

1.  Where  a  place  of  payment  is  specified  in  the  instru- 
ment and  it  is  there  presented; 

2.  Where  no  place  of  payment  is  specified,  but  the  address 
of  the  person  to  make  payment  is  given  in  the  instrument 
and  it  is  there  presented; 

3.  Where  no  place  of  payment  is  specified  and  no  address 
is  given  and  the  instrument  is  presented  at  the  usual  place 
of  business  or  residence  of  the  person  to  make  payment  {a). 

4.  In  any  other  case  if  presented  to  the  person  to  make 
payment  wherever  he  can  be  found,  or  if  presented  at  his 
las't  known  place  of  business  or  residence  (^). 

(a)  Gates  v.  Bec-chcr,  GO  N.  Y.  518,  522;  Iloltz  v.  Boppe,  37 
N.  Y.  034.  A  presentment  at  the  maker's  usual  place  of  business 
during  business  hours,  there  being  no  one  there  to  answer,  is  a 
sufficient  demand  to  charge  the  indorser;  for  the  maker  is  bound 
to  have  a  suitable  person  thc-ro  to  answer  inquiries,  and  pay  his 
notes,  if  thoro  .leinaii.lcd.  Baumgardnrr  v.  Reeves,  35  l*a.  St.  250; 
Wallace  v.  Crilly.  4(;  WU.  577.  And  presentment  at  su.h  i.lace 
is  sufficient,  though  it  be  closed,  there  being  no  explanation  fur- 


lOJ  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

iiished  as  to  why  it  is  closed.  Sulsbackor  v.  Hank  of  Charleston, 
8li  Tenn.  I'Ol.  ll.  however,  the  party  has  abandoned  his  place 
of  business  at  the  maturity  of  the  paper,  but  has  a  residence  or 
other  place  of  business  in  the  city,  which  could  be  ascertained 
by  reasonable  inquiry,  a  itresentnient  at  the  former  place  of  busi- 
ness would  not  be  sufficient.  (Id.)  The  making  and  dating  of  a 
promissory  note  at  a  particular  place  is  not  equivalent  to  making 
it  payable  there,  nor  does  it  supersede  the  necessity  for  present- 
ment and  demand  at  the  residence  or  place  of  business  of  the 
maker  if  it  be  known,  or  if  by  due  diligence  in  making  inquiry 
it  could  be  ascertained.  Oxnard  v.  Varnum,  111  Pa.  St.  193. 
But  where  a  bill  of  e.xchange  is  addressed  to  the  drawee  at  a 
particular  house,  and  the  same  is  accepted  generally  by  him,  the 
address  indicates  the  place  where  it  is  to  be  presented  for  pay- 
ment, and  a  preseiitment  there  is  sufficient  as  against  the  drawee 
and  indorsers.  Pierce  v.  Struthers,  2Y  Pa.  St.  249,  254; 
Struthers  v.  Blake  et  al,  30  Pa.  St.  139.  Where  a  note  is  dated 
at  a  particular  place,  and  no  other  place  is  designated  as  that 
of  its  negotiation  and  payment,  the  presumption  is  that  the  maker 
resides  where  the  note  is  dated,  and  that  he  contemplates  pay- 
ment at  that  place.  Sasscer  v.  Stone,  10  Md.  98;  Kicketts  v. 
Pendleton,  14  Md.  320;  Nailor  v.  Bowie,  3  Md.  251;  Clark  v. 
Seabright,  135  Pa.  St.  173.  But  this  is  presumption  only,  and 
if  he  resides  elsewhere  within  the  State  when  the  note  falls  due, 
and  this  is  known  to  the  holder,  demand  must  be  made  at  the 
maker's  residence  or  place  of  business.  Sasscer  v.  Stone,  10  Md. 
98.  When  the  maker  does  not  reside,  and  has  no  place  of  busi- 
ness, in  the  State  where  the  note  is  payable,  no  demand  upon 
him  is  necessary  in  order  to  charge  the  indorser.  Ricketts  v. 
Pendleton,  14  Md.  320.  And  if  the  maker  absconds,  this  will 
generally  excuse  the  demand;  but  if  he  changes  his  residence 
within  the  same  jurisdiction,  the  holder  must  endeavor  to  find  it 
and  make  demand  there.  Nailor  v.  Bowie,  3  Md.  251.  But  where 
the  maker  or  acceptor  waives  presentment  at  his  place  of  busi- 
ness or  residence,  presentment  elsewhere  may  be  sufficient.  King 
t'.  Holmes,  11  Pa.  St.  456;  Parker  v.  Kellogg,  158  Mass.  90. 

(&)  If  the  maker  leaves  the  State  subsequent  to  the  making  of 
the  note,  presentment  at  his  former  place  of  business  or  residence 
is  sufficient.    Nailor  r.  Bowie,  3  Md.  251. 


PRESENTMENT  FOR  PAYMENT.  IO3 

§  134.  Instrument  must  be  exhibited. —  The  instrument 
must  be  exhibited  to  the  person  from  whom  payment  is  de- 
manded,  and  when  it  is  paid  must  be  deHvered  up  to  the 
party  paying  it  (a). 

(a)  Ocean  Xat.  Bank  v.  Fant,  50  N.  Y.  474,  476;  Smith  v. 
Eockwell,  2  Hill,  482;  Musson  i;.  Lake,  4  How.  262;  Freeman  v. 
Boynton,  7  Mass.  483 ;  Draper  v.  Clemens,  7  Mo.  52.  This  is  requi- 
site in  order  that  the  drawer  or  acceptor  may  be  able  to  judge  (1) 
of  the  genuineness  of  the  instrument;  (2)  of  the  light  of  the 
holder  to  receive  payment;  and  (3)  that  he  may  immediately  re- 
claim possession  upon  paying  the  amount.  Waring  v.  Betts,  90 
Va.  46,  51.  Demand  of  payment  without  actual  exhibition  of  the 
note  is  sufficient  to  bind  the  indofser  where  the  maker  does  not 
demand  to  see  the  note  but  refuses  payment  on  other  grounds. 
Legg  V.  Viman,  165  Mass.  555;  Waring  v.  Betts,  90  Va.  46;  Lock- 
wood  V.  Crawford,  18  Conn.  361;  Fall  River  Union  Bank  v.  Wil- 
lard,  5  Metcalf,  216.  Where  the  note  is  secured  by  collaterals  the 
maker  is  entitled  to  require  that  thej-  be  delivered  with  the  note; 
and  if  he  i-nsists  upon  it,  they  must  be  tendered  with  the  note  or 
the  demand  of  payment  will  not  be  sufficient.  Ocean  Nat.  Bank  v. 
Fant,  50  N.  Y.  474. 

§  135.  Presentment  where  instrument  payable  at  bank, — 
Where  the  instrument  is  payable  at  a  bank,  presentment  for 
payment  must  be  made  during  banking  hours,  unless  the 
person  to  make  payment  has  no  funds  there  to  meet  it  at  any 
time  during  the  day,  in  which  case  presentment  at  any  hour 
before  the  bank  is  closed  on  that  day  is  sufticient  (a). 

(a)  See  Salt  Springs  National  Bank  v.  Burton,  58  N.  Y.  430; 
Bank  of  Syracuse  v.  IloUister,  17  N.  Y.  46;  Bank  of  Utica  v. 
Smith,  18  Johns.  230;  Parker  v.  Gordon,  7  East.  387;  Garnett  v. 
Woodcock,  1  Starkie,  475;  Reed  v.  Wilson,  41  N.  J.  Law,  29; 
Waring  v.  Betts,  90  Va.  46;  Shopard  v.  Chamberlain,  8  Gray,  225. 
Wliat  will  constitute  banking  hours  within  the  meaning  of  the 
statute  has  reference  to  the  general  custom  of  the  place  where 
th<?  transaction  occurs.  ColunibiaTi  Banking  Co.  v.  Bowen  (Wis.), 
Ill  N.  W.  Rep.  451.  Thus,  where  presentment  was  made  to  a 
Chicago  bank  between  three  and  six  o'clock  in  the  afternoon,  and 


104  THE    NEGOTIABLE    INSTRUMENTS    LAW. 

it   apivarcd   that   the   husincss   clay   of   the  hank  eontinued  after 
the   ekise   of  clearing-house   transactions,   so   as   to   enahle   hanks 
hokling   paper    for   collection    to    present   those    items   which    had 
been    refused   payment    through   the   clearings,    it   was   held   that 
the  presentment  satisfied  the  requirements  of  the  statute.     (Id.) 
If  a   note  held  hy   a  hank   at  which  it  is  payahle  is  not  paid 
when   due,   no   presentment   and   demand   of   payment   are  neces- 
sary.    Dykman    v.   Northridge,   1   App.   Div.    (N.   Y.)    26.     It   is 
sufficient  that  the  note  was  in  the  bank  on  the  day  it  fell  due, 
and  that  there  were  no  funds  of  the  maker  there,  or  other  pro- 
vision   for    payment.     Ilallowell    v.    Ourry,    41    Pa.    St.    322.     It 
has  been  held  that  tlie  office  of  a  private  banker  is  not  a  bank 
within  the  terms  of  a  note  made  payable  at  "  any  bank  in  Boston." 
Way   V.   Butterworth,   108   Mass.   509.     As  to  bank   customs  see 
Grand  Bank  v.  Blanchard,  23  Pick.  305,  306;  Mechanics'  Bank  v. 
Merchants'  Bank,  6  Mete.  13,  24;  Boston  Bank  v.  Hodges,  9  Pick. 
420;   People's  Bank   v.   Keech,   26   Md.   521.     But  now  that  the 
statute  prescribes  the  rules  as  to  presentment  these  matters  can 
no  longer  be  governed  by  custom ;  certainly  not  if  the  custom  con- 
flicts with  the  statute.    Under  the  statute,  paper  payable  at  a  bank 
may  be   presented  there  though  the  bank   is  closed  and  in  the 
hands  of  a  receiver,  and  a  demand  upon  the  receiver  personally  is 
not  necessary.     Schlesinger   i\   Schultz,   110  App.   Div.    (N.   Y.) 
356.     See  also   Berg  v.   Abbott,   83  Pa.    St.   177.     But  compare 
Hutchison  v.  Crutcher,  98  Tenn.  421,  where  it  was  held  that  when 
a  national  bank  has  been  placed  in  the  hands  of  a  receiver,  paper 
payable  at  the  bank  should  be  presented  at  the  office  of  the  re- 
ceiver.    See  section  133,  subdivision  1. 

The  authorities  are  not  agreed  upon  the  point  as  to  the  precise 
time  when  suit  may  be  brought  on  a  dishonored  note  payable  at  a 
bank,  some  holding  that  it  cannot  be  brought  until  the  day  after 
its  dishonor,  others  that  it  may  be  brought  at  any  time  after  the 
expiration  of  business  hours  on  the  day  it  is  payable,  and  others 
still  that  it  may  be  commenced  as  soon  as  payment  is  refused  on 
that  day.  Citizens'  Bank  v.  Lay,  80  Va.  436,  440;  Church  v.  Clark, 
21  Pick.  309;  Blackman  v.  Nearing,  43  Conn.  60;  Humphreys  v. 
Sutcliffe,  192  Pa.  St.  336. 

§  136.  Presentment    where    principal    debtor    is    dead. — 
Where  the  person  primarily  liable  on  the  instrument  is  dead, 


PRESENTMENT   FOR  PAYMENT.  IO5 

(a)  and  no  place  of  payment  is  specified,  presentment  for 
payment  must  be  made  to  his  personal  representative,  if 
such  there  be,  and  if  with  the  exercise  of  reasonable  dili- 
gence, he  can  be  found  (6). 

(a)  But  there  must  be  competent  and  legal  proof  of  his  death, 
and  that  the  party  upon  whom  the  demand  was  made  was  such 
representative;  the  statement  of  these  facts  in  the  protest  is  not 
prima  facie  proof  thereof.    Weems  v.  Farmers'  Bank,  15  Md.  231. 

(&)  The  fact  that  the  holder  is  excused  from  making  present- 
ment under  this  section  does  not  relieve  him  from  the  duty  of 
giving  notice  of  dishonor  to  the  indorser.  Reed  v.  Spear,  107 
App.  Div.  (X.  Y.)  1-14.  See  this  case,  also,  for  what  evidence 
will  justify  a  finding  that  the  holder  could  not,  with  reasonable 
diligence,  make  presentment  to  the  administrator  of  the  deceased 
maker. 

§  137.  Presentment  to  persons  liable  as  partners. — Where 
the  persons  primarily  liable  on  the  instrument  are  liable  as 
partners,  and  no  place  of  payment  is  sj^ecified,  presentment 
for  payment  may  be  made  to  any  one  of  them,  even  though 
there  has  been  a  dissolution  of  the  firm  (a). 

(o)  Gates  v.  Beecher,  60  N.  Y.  518;  Cayuga  County  Bank  v. 
Hunt,  2  Hill,  635;  Crowley  v.  Barry,  4  Gill,  194;  Fourth  Nat. 
Bank  v.  Henschuk,  52  Mo.  207. 

§  138.  Presentment  to  joint  debtors. —  Where  there  are 
several  persons  not  partners,  primarily  liable  on  the  instru- 
ment, and  no  place  of  payment  is  specified,  presentment  must 
be  made  to  them  all  (a). 

(a)  Gates  v.  Beecher,  GO  X.  Y.  518,  523;  Union  Bank  v.  Willis, 
8  Mete.  504;  Arnold  i'.  Dresser,  8  Allen,  435;  Willis  i'.  Green,  5 
Hill,  232 ;  Benedict  v.  Schmieg,  13  Wash.  47G.  In  some  cases  this 
might  be  impracticable,  but  such  cases  are  covered  by  section  142. 
The  holder  of  a  joint  and  several  note  may  sue  one  maker  alone 
upon  one  cause  of  action  arising  out  of  the  note  and  all  makers 
grnorally  upon  another  such  f-ause  of  action.  Davis  v.  Schmidt, 
126  Wis.  461. 


lo6  THE    NEGOTlAnLK    INSTRL' M  ENTS    LAW. 

§  139.  When  presentment  not  required  to  charge  the 
drawer. —  rresentiiienl  lor  payment  is  not  required  in  order 
to  charge  the  drawer  where  he  has  no  right  to  expect  or 
require  that  the  drawee  or  acceptor  will  pay  the  instru- 
ment {a). 

(a)  But  presentment  is  not  dispensed  with  merely  because  the 
drawer  has  no  funds  in  the  hands  of  tlie  drawee.  Life  Insurance 
Company  v.  Pendleton,  112  U.  S.  708;  Dickens  v.  Beal,  10  Pot. 
572;  Welch  v.  B.  C.  Taylor  Mfg.  Co.,  82  111.  581;  Kimball  v. 
Bryan,  56  Iowa,  632;  Kingsley  v.  Kobinson,  21  Pick.  327.  It  is 
sutHcient  if  the  drawer  bad  a  reasonable  expectation  that  the  bill 
would  be  paid;  or  if  there  was  an  agreement  between  him  and  the 
drawee  that  the  latter  should  accept,  or  a  course  of  dealing  be- 
tween them  by  which  the  drawee  was  accustomed  to  accept  without 
reference  to  the  state  of  the  mutual  account.  See  cases  cited 
above.  Presentment  of  a  check  is  excused  where  the  making  of 
the  check  was  a  fraud  upon  the  part  of  the  drawer,  he  having  no 
funds  in  the  bank,  and  no  ground  for  a  reasonable  expectation 
that  it  would  be  paid.  Beaureguard  v.  Knowlton,  156  Mass.  395, 
396. 

§  140.  When  presentment  not  required  to  charge  the  in- 
dorser. —  Presentment  for  payment  is  not  required  in  order 
to  charge  an  indorser  where  the  instrument  was  made  or 
accepted  for  his  accommodation,  and  he  has  no  reason  to 
expect  that  the  instrument  will  be  paid  if  presented. 

§  141.  When  delay  in  making  presentment  is  excused. — 
Delay  in  making  presentment  for  payment  is  excused  when 
the  delay  is  caused  by  circumstances  beyond  the  control  of 
the  holder  and  not  imputable  to  his  default,  misconduct  or 
negligence  (a).  When  the  cause  of  delay  ceases  to  operate, 
presentment  must  be  made  with  reasonable  diligence. 

(a)  "Windham  Bank  v.  Norton,  22  Conn.  213;  Pier  v.  Hein- 
richsofFen,  67  Mo.  163.     In  these  cases  the  delay  was  caused  by 


PRESENTMENT   FOR   PAYMENT.  IO7 

miscarriage  in  the  mail.  See  section  17(3.  Sickness  of  the  holder 
of  the  note  is  not  an  excuse  for  the  failure  to  present  it  at  the 
proper  time,  unless  it  was  not  only  sudden,  but  so  severe  as  not 
only  to  prevent  him  from  making  the  presentment  and  giving 
notice  of  non-payment  himself,  but  from  employing  another  per- 
son to  do  it;  and  th^n  it  must  be  shown  that  the  proper  ^eps 
•were  taken  as  soon  as  the  disability  was  removed.  Wilson  v. 
Senier,  1-i  Wis.  380.  Where  the  facts  are  not  disputed  the  ques- 
tion of  due  diligence  is  one  of  law  for  the  court;  but  if  there  is  a 
dispute  as  to  the  facts,  the  question  is  for  the  jury.  Belden  v. 
Lamb,  17  Conn.  451. 

§  142.  When  presentment  may  be  dispensed  with. —  Pre- 
sentment for  payment  is  dispensed  with  : 

1.  Where  after  the  exercise  of  reasonable  diligence  pre- 
sentment as  required  by  this  act  cannot  be  made  (a)  ; 

2.  Where  the  drawee  is  a  fictitious  person ; 

3.  By  waiver  of  presentment  express  or  implied  (b). 

(a)  The  burden  is  upon  the  holder  to  show  that  due  diligence 
was  used.  Eato,n  v.  McMahon,  42  Wis.  484.  It  is  the  duty  of  a 
holder  to  give  the  notary  information  as  to  the  residence  of  the 
drawer  and  indorser;  and  if  this  is  unknown  to  the  holder,  he 
must  inquire  of  those  whose  names  are  upon  the  note  or  bill  as 
to  the  residence  which  he  does  not  know.  If  there  are  no:ne  such, 
he  must  use  duo  diligence  to  ascertain  them.  It  will  not  do  for 
the  holder  to  put  the  note  or  bill  in  the  hands  of  the  notary  at  the 
place  where  it  was  drawn  without  furnishing  him  any  informa- 
tion as  to  the  residence  of  the  maker,  or  that  of  the  indorser,  and 
then  for  the  notary,  without  inquiry  from  him,  to  return  the  note 
without  demand  or  notice.  The  holder  is  the  one  most  likely  of 
all  persons  to  know  the  place  of  residence  of  those  to  whom  he 
looks  for  payment,  and  due  diligence  requires  that  he  should  give 
the  information  to  his  agent,  whom  he  employs  to  make  demand 
from  the  maker  and  give  notice  to  the  indorser;  or,  if  ho  neglects 
to  do  so,  that  the  agent  should  n^iuire  of  him  where  the  parties 
residf.  Smith  v.  Fisher,  24  Pa.  St.  222.  When  the  facts  are 
undi-spntcd,  the  question  of  diligence  is  for  the  court.  Smith  v. 
Fisher,  24  Pa.  St.  222;  Wheeler  v.  Field,  0  Mete.  290.  Present- 
ment  is  not  dispensed   with   by  the  insolvency  of  the  maker  or 


lo8  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

drawee.  Keinoko  v.  Wright,  l>3  Wis.  308;  llawley  i-.  Jette,  10 
Oregon  31;  Bensonhurst  r.  Wilby,  45  Ohio  St.  340;  Jackson  v. 
Kiehards,  2  Caines,  343;  Armstrong  v.  Thurston,  11  Md.  148. 

{b)   The  waiver  may  he  nnide  either  during  the  currency  of  the 
note  or  after  its  maturity.     Power  v.  Mitchell,  7  Wis.  101.     And 
evidence  of  contemporaneous  facts  and  circumstances,  at  the  time 
of  the  transaction,  may  be  shown  in  evidence,  in  order  to  ascertain 
whether   or   not   a   waiver   was   intended.      Baumeister   v.   Kuntz 
(Fla.),  42  So.  886.     The  waiver  may  be  made  either  verbally  or 
in  writing.     Smith  v.  Lownsdale,  6  Oregon  78.     Nor  is  it  neces- 
sary that  the  waiver  should  be  direct  and  positive.     It  may  result 
from  implication  and  usage,  or  from  any  understanding  between  the 
parties  which  is  of  a  character  to  satisfy  the  mind  that  a  waiver 
is  intended.     Cady  v.  Bradshaw,  116  N.  Y.  188,  191.     The  assent 
must  be  clearly  established,  however,  and  will  not  be  inferred  from 
doubtful  or  equivocal  acts  or  language.     Ross  v.  Tlurd,  71  N.  Y. 
14.     But  any  language  is  sufficient,  which  is  calculated  to  induce 
the  holder  to   forbear  taking  the  necessary  steps  to  charge   the 
indorser.     Torbert  v.  Montague,  38  Colo.  325;  Moyer  &  Brothers' 
Appeal,    87    Pa.    129;    Boyd    v.    Bank    of    Toledo,    32    Ohio    St., 
526.     Where    the    indorser    requests    the    holder    to    extend    the 
time  of  payment  and  promises  to  let  his  name  remain  on  the  in- 
strument, this  will  amount  to  a  waiver  of  presentment  and  notice 
of  non-payment.    Cady  v.  Bradshaw,  116  N.  Y.  188,  191,  192.    So, 
a  telegram  sent  to  the  collecting  bank  requesting  it  to  pay  the  note 
and  save  protest  and  draw,  in  reply  to  an  inquiry  made  of  the 
firm  by  such  bank,  is  a  sufficient  waiver.     Seldner  v.  Mount  Jack- 
son National  Bank,  66  Md.  488.      So,  where  an  indorser  admits 
his  liability  at  the  time  of  the  maturity  of  the  note  and  accom- 
panies  such   admission   with   an   offer    to    "arrange  the   matter" 
with   the  holders,   and   thereafter   by   his  conduct    shows  that  he 
regards   himself   as   liable,   and    asks    for   indulgence.      Moyer   & 
Brothers'  Appeal,   87  Pa.   St.   129.     So,  where  a  note  is  a  short 
time  before  the  day  of  its  maturity,  presented  to  an  indorser,  and 
the  latter  then  promises  that  if  the  note  is  suffered  to  run   he 
will  pay  it  whenever  payment  is  called  for.    Hale  v.  Danforth,  46 
Wis.  554.     And  so,  where,  in  response  to  inquiry  by  the  holder, 
the  indorser  told  him  that  it  would  be  of  no  use  to  call  upon  the 
maker.     Barker  v.  Parker,  6  Pick.  80.    A  waiver  of  notice  merely 


PRESENTMENT   FOR   PAYMENT.  IO9 

does  not  excuse  demand  of  payment.     Berkshire  Bank  v.  Jones, 
6  Mass.  524;  Low  v.  Howard,  11  Cush.  268,  270. 

An  agreement  to  waive  demand  and  notice  is  not  within  the 
statute  of  frauds;  it  is  not  a  new  contract,  but  only  a  w'aiver 
absolutely  or  in  part  of  a  condition  precedent  to  liability.  Taun- 
ton Bank  v.  Richardson,  5  Pick.  436;  Barclay  v.  Weaver,  19  Pa. 
St.  396 ;  Power  v.  Mitchell,  7  Wis.  159,  166.  And  from  the  nature 
of  the  indorser's  contract  no  new  consideration  is  required  to 
support  the  waiver  whether  given  before  or  after  the  maturity  of 
the  paper.  Burgettstown  Ts^at.  Bank  v.  Nill,  213  Pa.  St.  456.  The 
facts  constituting  the  waiver  must  be  specifically  pleaded.  Gal- 
braith  v.  Shepard,  43  Wash.  698.  As  to  waiver  where  the  maker 
has  transferred  all  his  property  to  the  indorsee,  see  Brandt  v. 
Mickle,  26  Md.  436;  Mechanics'  Bank  v.  Griswold,  7  Wend.  165; 
Moore  V.  Alexander,  63  App.  Div.  (N.  Y.)  100;  Brown  v.  Maffey, 
15  East  222 ;  Bond  v.  Farnham,  5  Mass.  170.  For  cases  constru- 
ing waivers  see  Parr  v.  City  Trust  Company,  95  Md.  291,  300- 
301;  Toole  v.  Crafts,  193  Mass.  110;  Baumeister  v.  Kuntz  (Fla.), 
42  So.  Eep.  886. 

§  143.  When   instrument   dishonored   by  non-payment. — 

The  instrument  is  dishonored  by  non-payment  when : 

1.  It  is  duly  presented  for  payment  and  payment  is  re- 
fused or  cannot  be  obtained ;  or 

2.  Presentment  is  excused  and  the  instrument  is  overdue 
and  impaid. 

^  144.  Liability  of  person  secondarily  liable,  when  instru- 
ment dishonored. —  Subject  to  tlic  provisions  of  this  act, 
when  the  instrument  is  dishonored  l)y  non-payment,  an 
immediate  rig-ht  of  recourse  to  all  parties  secondarily  liable 
thereon,  accrues  to  the  holder  (a). 

(a)  When  the  indorser's  liability  has  hooAi  fixed  by  demajid  aTid 
notice  of  dishonor,  hc'  bocomcs  an  indopondoiit  and  priTicipal 
debtor,  and  docs  not  staiul  in  the  position  of  a  more  surety.  Ger- 
man-American Bank  V.  Niagara  Cycle  Co.,  13  App.  l^iv.  (N.  Y.) 
450;  First  Nat.  Bank  v.  Wot.d.  71  N.  Y.  405.  411.  Though  the 
)i()l(l<r  has  received  collateral   frdin  the  iii;i1<(m-,  tlu-  biw   iniiilics  no 


I  10  THE    NEGOTIABLE    INSTRUMENTS    LAW. 

contract  to  proceed  on  tlu>  eollat*  rals  before  sninj^  the  indorscr. 
Enek  r.  Freehold  Bank,  37  N.  J.  Law,  307.  The  section  does  not 
change  the  law  as  to  conditional  gnaranties,  as,  for  example,  a 
guaranty  of  the  collectibility  of  the  instrument,  in  which  case 
there  is  no  right  of  recourse  against  the  guarantor  until  the  holder 
has  first  made  proper  effort  to  collect  from  the  principal  debtor, 
Cowles  V.  Peck,  55  Conn.  251;  Summers  v.  Barrett,  C5  Iowa,  292; 
for  in  such  case  the  terms  of  the  express  contract  exclude  the  idea 
of  an  intention  to  incur  the  liability  prescribed  by  the  statute. 

§  145.  Time  of  maturity. —  Every  negotiable  instrument  is 
payable  at  the  time  fixed  therein  without  grace.  When 
the  day  of  maturity  falls  upon  Sunday  or  a  holiday,  the 
instrument  is  payable  on  the  next  succeeding  business  day. 
Instruments  falling  due  or  becoming  payable  (a)  on  Satur- 
day are  to  be  presented  for  payment  on  the  next  succeeding 
business  day,  except  that  instruments  payable  on  demand 
may,  at  the  option  of  the  holder,  be  presented  for  payment 
before  12  o'clock  noon  on  Saturday  when  that  entire  day  is 
not  a  holiday  (b). 

(a)  The  words  "  or  becoming  payable  "  were  added  by  Laws  of 
New  York,  1898,  chapter  336.  This  amendment  seems  to  have 
been  made  upon  the  suggestion  of  some  one  who  feared  that  the 
phrase  "  falling  due  on  Saturday,"  might  not  include  a  case  where 
the  date  of  maturity  occurs  on  a  holiday  immediately  preceding 
Saturday.  The  doubt  seems  to  have  been  based  upon  a  miscon- 
ception of  the  correct  meaning  of  the  term  "falling  due."  In 
common  parlance,  we  sometimes  speak  of  paper  as  "  falling  due 
on  a  holiday,"  meaning  by  this,  that  the  time  for  which  the  note 
or  bill  has  to  run  matures  on  that  day ;  but  this  language  is  not 
strictly  accurate;  for,  as  the  holiday  is  dies  non,  the  paper  is  not, 
in  fact,  due  on  that  day,  but  is  due  on  the  day  following.  In  the 
case  mentioned,  therefore,  paper  so  maturing  may  be  correctly 
described  as  "falling  due  on  Saturday."  As  to  paper  maturing 
on  Saturday,  however,  where  that  day  is  not  a  holiday,  there 
is  a  distinction  between  "falling  due"  and  "becoming  payable;" 
for,  in  such  case,  Saturday  is  not  dies  non,  and,  properly  speaking, 
the   paper   is   due   on    that   day,   though   for   the   convenience  of 


PRESENTMENT   FOR  PAYMENT.  Ill 

bankers  and  others,  the  statute  authorizes  presentment  on  Mon- 
day. This  distinction  was  observed  in  the  section  as  it  stood 
originally,  but  the  amendment  destroys  the  harmony  between  the 
second  and  third  sentences.  The  only  other  States  which  have 
adopted  this  change  appear  to  be  Missouri  and  Virginia. 

(h)  Laws  of  Mass.  March  30,  1895,  May  28,  1895;  Laws  of 
Maine,  1897,  Ch.  259;  Laws  of  New  York,  1887,  Ch.  289,  Ch.  461; 
Laws  of  Penn.  May  31,  1893 ;  Laws  of  U.  S.  Feb.  18,  1893 ;  Laws 
of  N.  J.  1895,  Ch.  43.  This  section  varies  greatly  in  the  different 
States,  both  as  to  grace  and  as  to  paper  maturing  on  Saturday. 

§146.  Time;  how  computed. —  Where  the  instrument  is 
payable  at  a  fixed  period  after  date,  after  sight,  or  after  the 
happening  of  a  specified  event,  the  time  of  payment  is  deter- 
mined by  excluding  the  day  from  which  the  time  is  to  begin 
to  run,  and  by  including  the  date  of  payment  (a). 

(a)   See  New  York  Statutory  Construction  Law,  sections  26,  27. 

§  147.  Rule  where  instrument  payable  at  bank. —  Where 
the  instrument  is  made  payable  at  a  bank  it  is  equivalent  to 
an  order  to  the  bank  to  pay  the  same  for  the  account  of  the^ 
principal  debtor  thereon  (a).  /L«- — •  *— <5X-^ 

(a)  Prior  to  the  statute  there  wag  some  conflict  in  the  decisions  ^Vi 
as  to  the  authority  of  a  bank  to  pay  a  note  or  acceptance  made 
payable  there.  The  rule  adopted  in  the  statute  is  sustained  by  the 
weight  of  authority;  and  is  also  the  rule  which  is  most  convenient 
in  practice.  It  is  supported  by  the  following  decisions:  Aetna 
Nat.  "Bank  v.  Fourth  Nat.  Bank,  46  N.  Y.  82;  Commercial  Bank 
V.  TTughos,  17  Wend.  94;  Commercial  Nat.  Bank  v.  TTonningor, 
105  Pa.  St.  496;  Bedford  Bank  v.  Acoarn,  125  Ind.  582;  Home 
Nat.  Bank  v.  Newton,  8  Bradwell,  563;  coiifra:  Grissom  t'.  Com- 
mercial Bank,  87  Tenn.  350.  Tn  Pennsylvania  it  is  hold  that 
where  a  bank  is  the  holder  of  a  note  payable  at  11h'  banking 
bouse,  and  upon  its  maturity  the  maker  has  a  cash  deposit  in  such 
bank  exceeding  the  amount  of  the  note,  which  deposit  is  not 
fipecially  applicable  to  a  particular  pun'"se,  the  bank  is  bound  to 
charge  up  the  amount  of  the  note  against  the  deposit.     In  such 


6»>- 


v-Tt  S 


11 J  THE    iNEGOTlABLE   INSTRUMENTS    LAW. 

cases  the  note  is  in  ctloct  a  draft  on  the  bank  in  favor  of  the 
holder,  and  in  diseharge  of  the  indorser.  German  National  Bank 
r.  Foreman,  li>8  Pa.  St.  474,  4Ti);  Commercial  Nalioual  liank  c. 
llenninger,  105  Pa.  4!»().  Put  it  is  also  held  in  that  State  that 
while  a  bank  whieh  has  discounted  a  promissory  note  may  appro- 
priate to  the  payment  of  the  note  funds  in  its  hands  belonging  to 
any  party  to  the  note,  when  payment  is  not  made  at  the  time  and 
place  named,  yet  it  is  not  bound  to  do  so  as  to  any  party  except 
the  makers.  Mechanics'  and  Traders'  Bank  v.  Seitz,  150  Pa.  St. 
632. 

§  148.  What  constitutes  payment  in  due  course. —  Pay- 
ment is  made  in  due  course  when  it  is  made  at  or  aftei^_the 
matiiritv  of  the  instrument  (0)  to  the  holder  (b)  thereof 
in  good  faith  and  without  notice  that  his  title  is  defective. 

(a)  Payment  before  the  day  is  a  defense  which  binds  only  the 
party  receiving  payment  and  those  who  stand  in  his  shoes.  Wat- 
son V.  Wyman,  161  Mass.  96,  99. 

(6)  It  is  the  duty  of  the  maker  or  acceptor  to  require  a  produc- 
tion of  the  paper  before  payi,ng  the  same,  and  possession  is  gen- 
erally the  only  adequate  evidence  upon  which  he  has  any  right  to 
rely.  Loizeaux  v.  Fremder,  123  Wis.  193;  Adair  v.  Lenox,  15 
Oregon  489.  The  rule  is  that  if  a  bill  or  note  be  paid  at  maturity, 
in  full,  by  the  acceptor  or  maker,  or  other  party  liable  to  a  person 
having  a  legal  title  in  himself  by  indorsement,  and  having  the 
custody  and  possessio,n  of  the  bill  ready  to  surrender,  and  the 
party  paying  has  no  notice  of  any  defect  of  title  or  authority  to 
receive,  the  payment  will  be  good.  But  if  upon  such  payment 
the  holder  has  not  the  actual  possession  of  the  paper  ready  to  be 
delivered,  and  does  not  in  fact  surrender  it,  but  gives  a  receipt 
or  other  evidence  of  the  payment,  and  it  turius  out  that  the  party 
thus  receiving  had  not  a  good  right  and  lawful  authority  to  re- 
ceive and  collect  the  money,  but  that  another  person  has  such 
right,  the  payment  will  not  discharge  the  party  paying,  but  will 
be  a  payment  in  his  own  wrong.  Wheeler  v.  Guild,  20  Pick.  545, 
553 ;  Trustees  of  the  I.  I.  Funds  v.  Lewis,  34  Fla.  424,  428.  Con- 
cerning this  rule,  the  Supreme  Court  of  Wisconsin  said  in  a  late 
case:  "It  is  so  simple,  and,  once  understood,  furnishes  so  easy 
and  sure  a  means  for  both  debtor  and  owner  to  protect  themselves 


PRESENTMENT   FOR  PAYMENT.  II3 

against  unauthorized  acts  of  others,  that  it  ought  not  to  be  weak- 
ened or  confused.  The  holder  can  always  be  safe  by  retaining 
the  instrument  in  his  possession;  the  debtor,  by  refusing  payment 
without  actual  presentation.  It  is  justified  in  application  to 
negotiable  paper  distinctively  from  other  property  by  the  very 
dominant  purpose  of  easy  and  probable  transfer  at  any  moment, 
so  that  what  may  be  true  as  to  ownership  of  such  paper  on  one 
day  is  likely  to  have  changed  on  the  next.  On  the  probability  of 
such  change  the  negotiability  of  the  instrument  is  a  continual 
warning."  Loizeaux  v.  Fremder,  123  Wis.  193,  198.  Such  rule 
applies  generally  to  all  negotiable  paper  independently  of  the 
existence  of  any  mortgage  or  other  security.  Marling  v.  Nommeft- 
sen,  127  Wis.  363.  Paj-ment  made  to  the  original  holder,  after  in- 
dorsement and  deliveiy  of  the  paper  even  as  collateral  security, 
is  no  defense  to  a  suit  on  the  note  by  the  indorsee,  although  the 
payment  was  made  by  the  maker  without  notice  or  knowledge  of 
the  transfer.  Gosling  v.  Griffin,  85  Tenn.  737.  But  while  a  per- 
son not  in  the  actual  possession  of  negotiable  paper  is  presumed 
from  that  fact  alone  to  have  no  authority  to  receive  pa:snnent 
thereon,  yet  such  presumption  may  be  rebutted  and  overcome  by 
evidence  showing  actual  authority.  Swengle  v.  Wells,  7  Ore.  222. 
The  original  payee  of  a  negotiable  note  in  possession  thereof,  is 
presumed  to  be  the  owner,  and  has  ostensible  authority  to  receive 
payment,  although  the  note  bears  the  blank  indorsement  of  such 
payee.  Home  Savings  Bank  v.  Stewart  (Neb.),  110  N.  W.  Rep. 
947. 


I  14  THE   MEGOTIABLE   INSTRUMENTS   LAW. 


ARTICLE  VIII. 
Notice  of  Dishonor. 

Section  160.  To  whom  notice  of  dishonor  must  be  given. 

161.  By  whom  given. 

162.  Notice  given  by  agent. 

163.  Effect  of  notice  given  on  behalf  of  holder. 

164.  Effect  w^iere  notice  is  given  by  party  entitled 

thereto. 

165.  When  agent  may  give  notice. 

166.  When  notice  sufficient. 

167.  Form  of  notice. 

168.  To  whom  notice  may  be  given. 

169.  Notice  where  party  is  dead. 

170.  Notice  to  partners. 

171.  Notice  to  persons  jointly  liable. 

172.  Notice  to  bankrupt. 

173.  Time  within  which  notice  must  be  given. 

174.  Where  parties  reside  in  same  place. 

175.  Where  parties  reside  in  different  places. 

176.  When  sender  deemed  to  have  given  due  notice. 

177.  Deposit  in  post-office,  what  constitutes. 

178.  Notice  to  subsequent  parties,  time  of. 

179.  Where  notice  must  be  sent. 

180.  Waiver  of  notice. 

181.  Whom  affected  by  waiver. 

182.  Waiver  of  protest. 

183.  When  notice  dispensed  with. 

184.  Delay  in  giving  notice;  how  excused. 

185.  When  notice  need  not  be  given  to  drawer. 

186.  When  notice  need  not  be  given  to  indorser. 


NOTICE  OF  DISHONOR.  115 

Section  187.  Notice  of  non-payment  where  acceptance  re- 
fused. 

188.  Effect  of  omission  to  give  notice  of  non-ac- 

ceptance. 

189.  When  protest  need  not  be  made;  when  must 

be  made. 

§  160.  To   whom   notice    of    dishonor   must   be    given.—  ^iJU.^ 
Except  as  herein  otherwise  provided,  when  a  negotiable  in-  ^F?      -^ 
strument  has  been  dishonored  by  non-acceptance  or  non-  „/// ^  /^ 
payment,  notice  of  dishonor  must  be  given  to  the  drawer  and     ^  ^ 
to  each  indorser,  and  any  drawer  or  indorser  to  whom  such 
notice  is  not  given  is  discharged  (a). 

(a)  The  burden  of  proving  that  due  notice  was  given  is  on,  the 
holder.  Marks  v.  Boone,  24  Y\a.  177.  Where  a  note  gives  the 
holder  an  option  to  declare  the  whole  sum  due  upon  default  in 
the  payment  of  interest,  he  must  allege  and  prove  presentment 
and  notice  of  dishonor  in  order  that  he  may  hold  an  indorser. 
Galbraith  v.  Shepard,  43  Wash.  698.  The  cashier  of  a  bank,  when 
informed  of  an  outstanding  check,  after  it  had  been  placed  in 
the  mails  for  transmission  to  the  drawee  for  payment,  stated  to 
the  cashier  of  the  bank  remitting  the  check  that  it  would  be  paid 
if  the  drawer  had  sufficient  funds  when  the  check  was  received, 
otherwise  not:  —  Held,  that  such  Information  did  not  constitute 
a  dishonor  of  the  chock,  so  as  to  require  the  holder  to  give  notice 
to  the  indorser  before  payment  had,  in  fact,  been  refused  on  the 
receipt  of  the  check  by  the  drawee.  Citizens  Bank  v.  First  Nat. 
Bank  (Iowa),  113  N.  W.  Rep.  481.  The  rule  as  to  notice  does 
not  apply  to  guarantors.  Brown  v.  Curtiss,  2  N.  Y.  225;  Allen 
V.  Rightmero,  20  Johns.  365;  Breed  v.  TTillhouse,  7  Conn.  523; 
Roberts  i'.  Hawkins,  70  Mich.  566;  Ilungerford  r.  O'Brien,  37 
Minn.  306.  And  proceedings  against  the  maker  are  necessary 
only  where  there  is  a  guaranty  of  collection.  Brown  v.  Curtiss, 
Bupra. 

§  161.  By  whom  given. —  The   notice   may   be   given   by 
or  on  behalf  rif  tlir  Imlder,  or  by  or  on  bchnlf  of  any  pnrtv 


Il6  Till-:    XEGOTIAULK    IXSIRL'MENTS    LAW. 

to  the  instrument  who  might  be  compelled  to  pay  it  to  the 
hoKler,  and  who,  upon  taking  it  up,  would  have  a  right  to 
reimbursement  from  the  party  to  whom  the  notice  is 
given  (a). 

(a)  It  was  once  held  that  no  party  could  p:ive  a  valid  notice 
unless  he  was  the  holder  at  the  time.  Tindal  v.  Brown,  1  Term 
Rep,  167.  But  this  doctrine,  after  having  been  followed  in  other 
cases  (ex  parte  Barclay,  7  Ves.  597;  Stewart  v.  Kennett,  2  Camp. 
177),  was  expressly  overruled  in  the  case  of  Chapman  v.  Keane  (3 
Adol.  (t  Ellis,  193),  in  which  most  of  the  previous  decisions  were 
reviewed.  But  notice  bj'  a  stranger  is  not  sufficient.  Lawrence 
V.  Miller,  16  K.  Y.  235,  237:  Chanoine  v.  Fowler,  3  Wend.  173; 
Brailsford  v.  Williams,  15  Md.  151.  And  a  party  who  has  been 
discharged  by  laches,  and  cannot  in  any  event  bring  an  action  on 
the  instrument,  is  deemed  a  stranger  for  this  purpose.  Harrison 
V.  Ruscoe,  15  L.  J.  Exch.  110;  15  M.  &  W.  231.  A  drawee  who 
refuses  acceptance  cannot  give  notice.  Stanton  v.  Blossom,  14 
Mass.  116.  A  firm  executed  two  promissory  notes  payable  to  the 
order  of  a  member  of  the  firm,  which  notes  were  first  indorsed 
by  J.  and  then  by  the  firm,  and  were  delivered  before  maturity 
to  the  plaintiff  bank.  The  notes  not  being  paid  at  maturity, 
notice  of  protest  was  served  upon  the  firm  and  with  it,  under 
separate  cover,  addressed  to  J  in  care  of  the  firm,  was  a  notice 
of  protest  directed  to  J,  which  the  firm  were  requested  to  forward 
to  him.  The  other  member  of  the  firm  immediately  mailed  such 
notice  of  protest  to  J,  at  the  latter's  regular  address  for  receiving 
mail  in  the  city  of  New  York: — Held,  that  while  J  was  pre- 
sumptivelj'  an  accommodation  indorser  for  the  firm  which  made 
the  notes,  and  while  the  firm  could  not,  therefore,  in  their  own 
behalf,  give  him  a  valid  notice  of  protest,  the  firm  could  and  did, 
on  behalf  of  the  plaintiff  bank,  and  as  its  agents,  give  such  a 
notice.  Traders'  Nat.  Bank  v.  Jones,  104  App.  Div.  (N.  Y.) 
433. 

§  162.  Notice  given  by  agent. —  Notice  of  dishonor  may 
be  giv^en  by  an  agent  either  in  his  own  name  (a)  or  in  the 
name  of  any  party  entitled  to  give  notice,  whether  that  party 
be  his  principal  or  not  (b). 


NOTICE   OF   DISHONOR.  11/ 

(a)  Drexler  v.  McGlynn,  99  Cal.  143.  But  a  notice  made  out  by 
a  notary  public  and  signed  by  mistake  with  the  name  of  the  maker 
of  the  note  instead  of  with  his  own  name,  without  the  authority 
of  the  maker,  is  insufficient.    Cabot  Bank  v.  "Warner,  92  Mass.  522. 

(b)  Banks  as  agents  for  collection  have  authority  to  receive  and 
transmit  notices  on  behalf  of  the  owners  of  the  paper.  West  River 
Bank  v.  Taylor,  34  N.  Y.  128,  130;  Colt  v.  Noble,  5  Mass.  167; 
Haynes  i;.  Birks,  3  Bor.  &  Pul.  599;  Robson  v.  Bennett,  2  Taunt. 
388.  An  agent  in  giving  notice  represents  and  acts  on  behalf  of 
his  principal,  and  this,  though  he  may  be  a  notary  and  act  in  his 
official  character.     Lawrence  v.  Miller,  16  N.  Y.  235,  238. 

§  163.  Effect  of  notice  given  en  behalf  of  holder. — Where 
notice  is  given  by  or  on  behalf  of  the  holder,  it  enures 
for  the  benefit  of  all  subsequent  holders  and  all  prior  par- 
ties who  have  a  right  of  recourse  against  the  party  to  whom 
it  is  given  (a). 

(a)  But  the  holder  is  not  bound  to  give  notice  to  any  one  but' 
his  immediate  indorser.  West  River  Bank  v.  Taylor,  34  N.  Y. 
128,  131;  Linn  v.  Horton,  17  Wis.  150,  153. 

g  164.  Effect    where    notice    is  given    by    party    entitled 
thereto. —  \\'here  notice  is  given  by  or  on  behalf  of  a  party 
entitled  to  give  notice,  it  enures  for  the  benefit  of  the  holder 
and  all  parties  subsequent  to  the  party  to  whom  notice  is  / 
given. 

i;  165.  When  agent  may  give  notice. —  Where  the  instru- 
ment has  been  dishonored  in  the  hands  of  an  agent,  he  may 
either  himself  give  notice  to  the  parties  lia1)le  thereon,  or 
he  may  give  notice  to  his  principal.  If  he  give  notice  to 
his  princii)al.  lie  must  do  so  within  the  same  time  as  if  lie 
were  the  liolder,  and  the  i)rincipal,  upon  tlic  receipt  of  sucli 
notice,  has  himself  tlie  same  time  for  giving  notice  as  if  the 
agent  liad  Ik-cu  an  independent  liolder  (a). 


IlS  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

i^a)  Kossou  r.  Carroll,  90  Tenn.  90.  But  if  the  at,'ciit  has  failed 
to  give  notice  to  his  principal  in  due  time,  the  latter  is  cut  off, 
though  he  may  thereafter  use  due  diligence  in  cojumunicating 
notice  to  antecedent  parties.     {Id.) 

§  i66.  When  notice  sufficient. — A  written  notice  need 
not  be  signed  {a),  and  an  insufficient  written  notice  may  be 
supplemented  and  validated  by  verbal  communication.  A 
misdescription  of  the  instrument  does  not  vitiate  the  notice 
unless  the  party  to  whom  the  notice  is  given  is  in  fact  mis- 
led tliereby  (b). 

(a)  See  Bank  v.  Dihrell,  91  Tenn.  301 ;  Spann  v.  Baltzell,  1  Fla. 
301 ;  Kilgore  v.  Bulkley,  14  Conai.  362 ;  Tobey  v.  Lenning,  14  Pa. 
St.  483. 

(b)  Aiken  v.  Marine  Bank,  16  "Wis.  G79.  Where  the 
instrument  ig  misdescribed,  the  fact  that  there  is  no 
other  instrument  to  which  the  notice  could  be  applied 
may  be  showoi  by  extrinsic  evidence.  Cayuga  County 
Bank  V.  Worden,  6  N.  Y.  19.  But  a  notice  of  protest 
signed  by  a  notary  public,  and  personally  delivered  by  him  to 
the  indorser  is  not  sulficient  to  charge  the  latter,  where  it  appears 
that  the  notice  was  addressed  to  another  person  than  the  indorser, 
and  stated  that  the  holder  looked  to  such  person  for  the  payment 
of  -the  note.    Marshall  v.  Sonneman,  216  Pa.  St.  65. 

§  167.  Form  of  notice. —  The  notice  may  be  in  writing 
or  merely  oral,  and  inay  be  given  in  any  terms  which  suffi- 
ciently identify  the  instrument,  and  indicate  that  it  has  been^ 
dishonored  by  non-acceptance  or  non-payment  (d).  It  may 
in  all  cases  be  given  by  delivering  it  personally  (b)  or 
through  the  mails  (c).  ^ 

(a)  Secomd  National  Bank  v.  Smith,  118  Wis.  18;  Sasscer  v. 
Farmers'  Bank,  4  Md.  409;  Brewster  v.  Arnold,  1  Wis.  264.  A 
notice  which  omits  an  essential  feature  of  the  note,  or  misdescribes 
it,  is  an  imperfect  one,  but  not  necessarily  invalid.  It  is  invalid 
only  where  it  fails  to  give  that  particular  information  which  it 
would  have  given  but  for  its  particular  imperfection;  and  even 


NOTICE  OF  DISHONOR.  1 19 

in  case  the  notice  in  itself  be  defective,  if,  from  evidence  aliunde 
of  the  attendant  circumstances,  it  is  apparent  that  the  indorser 
was  not   deceived  or  misled  as  to  the  identity  of  the  dishonored 
instrument,  he  will  be  charged.     Hodges  v.  Schuler,  22  N.  Y.  114 ; 
Artisans'  Bank  v.  Backus,  36  N.  Y.  106 ;  Gill  v.  Palmer,  29  Conn. 
57;  Rowland  v.  Adrian,  29  N.  J.  Law,  48;  Derham  0.  Donohue, 
155  Fed.   Rep.  385.     To  make  the  notice  defective  the  variance 
must   be  such   as  that,   under  the  circumstances   of   the  case,  it 
conveys  no  sufficient  knowledge  to  the  indorser  of  the   identity 
of  the  particular  instrument  which  has  been  dishonored.     Cayuga 
Coujity  Bank  v.  Worden,  1  N.  Y.  413,  417;  Mills  v.  Bank  of  U.  S., 
11  Wheat,  431 ;  Bank  of  Alexandria  v.  Swaim,  9  Peters,  33.     The 
notice  is  not  necessarily  defective  because  it  is  silent  as  to  the 
date  and  time  of  payment.  Youngs  v.  Lee,  12  X.  Y.  551,  or  fails 
to  state  that  demand  of  payment  was  made.  Mills  v.  Bank  of  U.  S., 
11  Wheat.  431,  or  doeg  not  state  at  whose  request  it  is  given, 
nor  who  is  the  owner  of  the  note.     Shed  v.  Brett,  1  Pick.  401. 
The  term  "  protested  "  when  contained  in  a  notice,  with  the  state- 
ment that  the  holder  looks  to  the  indorser  for  indemnity,  fairly 
and  necessarily  implies  that  the  note  or  bill  has  been  dishonored. 
Brewster  v.  Arnold,  1  Wis.  264.     A  note  is  well  described  when 
its  maker,  payee,  date,  amount  and  time  of  payment  are  stated. 
A  printed  notice  is  sufficient,   Cuyler  v.  Stevens,  4  Wend.  566; 
Bank  of  Cooperstown  v.  Woods,  28  N.  Y.  545,  and  the  signature 
of  the  notary  need  not  be  in  writing,  but  may  be  printed.     Bank 
of  Cooperstown  v.  Woods,  28  N.  Y.  561 ;  Sussex  Bank  v.  Baldwin, 
2  Harr.  (N.  J.),  487.     But  a  notice  which  i»  barely  enough  to 
put  the  indorser  upon  inquiry  is  not  sufficient.     Cook  v.  Litchfield, 
9  N.  Y.  279,  281.    It  must  reasonably  apprise  the  party  of  the  par- 
ticular paper  upon  which  he  is  sought  to  be  charged.     Home  In- 
surance Co.  V.  Greene,  19  N.  Y.  518;  Dodson  v.  Taylor,  56  N.  J. 
Law,  11.    In  the  New  York  case  cited  the  name  of  the  maker  was 
left  blank,   and   it   was  held  that  the  notice  was  not  sufficient. 
Notice  that  a  note  is  unpaid  would  not  necessarily  imply  that  it 
is  dishonored,  because  the  note  might  remain   unpaid,  while  in 
fact  it  may  never  have  been  presented  to  the  maker  for  payment. 
Hunter  v.  Van  Bomhorst!  1  Md.  504,  510.     But  such  notice  might 
be  good  if  the  note  is  payable  at  a  bank.     Id.     If  the  notice  in- 
dicates that  the  paper  was  presented  before  due,  it  is  not  sufficient. 
Etting  V.  Schuylkill  Bank.  2  Pa.  St.  355.    The  statement  that  the 
hoMrr  looks  for  payment  to  the  party  to  whom  notice  is  sent  ia 


IJO  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

not  necessary;  for  this  is  implied  from  the  fiiet  of  giving-  notice, 
l^ank  of  U.  8.  r.  Carneal,  2  IVters,  :A;i;  Mills  v.  ]^ank  of  U.  S.,  11 
"Wheat.  431,  436;  Nelson  v.  First  Nat.  Bank,  29  U.  S.  App. 
554;  09  Fed.  Kep.  798,  801;  10  C.  C.  A.  425;  Cowles  v.  Ilor- 
ton,  3  Conn.  523.  A  certificate  of  deposit  dated  January  25, 
1904,  duo  January  25,  1905,  was  duly  presented  for  payment. 
Payment  was  demanded  and  refused  on  January  25,  1905. 
Thereupon  a  notice  of  presentment,  demand,  and  dishonor  was 
sent  to,  and  received  by,  the  indorser,  which  was  dated 
January  25,  1904,  when  it  should  have  been  dated  January 
25,  1905,  which  stated  that  the  demand  and  dishonor  were 
on  the  day  of  the  date  of  the  notice,  that  the  certificate  was 
dated  January  25,  1905,  when  it  was  dated  January  25,  1904,  and 
it  omitted  to  recite  this  clause  which  was  in  the  certificate,  "  No 
interest  after  six  months." — Held,  that  the  notice  sufficiently 
identified  the  certificate  and  notified  the  indorser  of  due  present- 
ment, demand,  and  dishonor.  Derham  v.  Donohue,  155  Fed.  Rep. 
385.  Where  there  is  no  dispute  as  to  the  facts,  the  quesrtion  of 
the  sufficiency  of  the  notice  is  a  question  of  law  for  the  court. 
Cayuga  County  Bank  v.  "Worden,  6  N.  Y.  19. 

(h)  The  statute  wag  not  intended  to  change  the  rule  as  it  pre- 
viously existed.  Where  personal  service  is  relied  upon,  the  evi- 
dence must  show  either  actual  personal  service  or  an  ordinarily 
intelligent,  diligent  effort  to  make  personal  service  upon  the 
indorser  either  at  his  place  of  business  during  business  hours, 
or  at  his  residence  if  he  have  no  place  of  business;  but  if  he  be 
absent,  it  is  not  necessary  to  call  a  second  time,  and  the  notice 
may,  in  that  event,  be  left  with  any  one  found  in  charge,  or  if 
there  be  no  one  in  charge,  or  no  one  there,  then  the  giving  of 
notice  is  deemed  to  be  waived.  American  Exchange  National 
Bank  V.  American  Hotel  Victoria  Co.,  103  App.  Div.  (N.  T.) 
372,  374. 

(c)  The  rule  of  the  commercial  law  was  well  settled  that  if  the 
parties  resided  in  the  same  place  the  notice  must  be  personal;  that 
is,  must  be  given  to  the  individual  or  left  at  his  domicile  or  place 
of  business.  Sheldon  v.  Benham,  4  Hill,  129;  Brown  v.  Bank  of 
Abingdon,  85  Va.  95;  Boyd's  Admr.  v.  City  Savings  Bank,  15 
Gratt.  501,  505 ;  Bell  v.  Hagerstown  Bank,  7  Gill,  216 ;  Westfall  v. 
Farwell,  13  Wis.  504,  509.  But  the  courts  have  been  inclined  to 
restrict  the  general  rule,  and  established  many  exceptions  to  it. 
Bank  of  Columbia  v.  T^awrence,  1  Peters,  578.  In  the  notes  to  1 
American  Lead.  Cas.  (402)  it  is  said :  "  It  ig  obvious  that  the  rule 


NOTICE   OF   DISHONOR.  121 

requiring-  personal  notice,  where  the  parties  reside  in  the  same 
place,  has  lost  its  reasonable  force  and  exists  only  by  authority. 
Instead  of  undermining  it  by  exceptions  that  conflict  with  it  in 
principle  and  render  the  subject  embarrassing  in  practice,  it 
would  be  much  better  to  declare  that  the  rule  itsfelf  has  become 
obsolete  and  is  abolished."  But  it  cannot  properly  be  said  that 
the  rule  had  become  obsolete,  having  been  recognized  and  acted 
on  in  many  recent  as  well  ag  older  cases,  and  having  in  no  case 
been  denied  or  disregarded.  It  was,  therefore,  too  firmly  estab- 
lished to  be  abolished  by  the  courts.  See  Boyd's  Admr.  v.  City 
Savings  Bank,  15  Graft.  501,  505.  In  New  York,  service  by  mail 
in  such  cases  was  authorized  by  Laws  1857,  Chap.  416.  For  the 
construction  of  the  former  statute  of  Wisconsin  see  Smith  v. 
Hill,  6  Wis.  154;  Westfall  v.  Farwell,  13  Wis.  504. 

§  i68.  To  whom  notice  may  be  given. —  Notice  of  dis- 
honor may  be  given  either  to  the  party  himself  or  to  his 
agent  in  that  behalf  (a). 

(a)  Fa.s3iu  V.  Hubbard,  55  N.  Y.  465,  471;  Lake  Shore  National 
Bank  V.  Butler  Colliery  Co.,  51  Hun,  63,  68.  In  Firth  v..  Thrush, 
8  Barn.  &  Cress.  387,  the  opinion  was  expressed  that  authority  to 
indorse  negotiable  paper  carried  with  it  authority  to  receive  notice 
of  its  dishonor.  And  in  Persons  r.  Kruger,  45  App.  Div.  187,  it 
was  held  that  a  notice  of  protest  may  be  served  upon  an  agent  of 
the  payee  and  indorscr,  where  the  agent  has  authority  to  make  and 
indorse  paper,  and  hag  authority  to  act  and  has  acted  as  the  gen- 
eral agent  of  the  payee  in  the  conduct  of  his  business,  and  has 
had  full  charge  of  the  acts  and  dealings  with  the  bank  at  which 
the  paper  was  discounted  and  the  management  of  the  paper.  A 
notice  of  non-payment  sent  to  the  indorser  inclosed  under  seal 
and  delivered  by  the  messenger  to  one  in  the  employment  of  the 
indorser.  with  directions  not  to  open  it,  is  insufficient.  Paine  v. 
Edsell,  19  Pa.  St.  178. 

^  i5g.  Notice  where  party  is  dead. —  When  any  p;.rty  is 
(lead,  anfl  his  deatli  is  known  to  the  party  givin^:  notice,  the 
notice  nuist  be  given  to  a  personal  representative,  if  there 
be  one,  and  if  with  reasonable  diligence  he  can  be  found  (a). 
If  there  be  no  personal  representative,  notice  may  be  sent  to 


I_'J  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

the  last  residence  or  last  place  of  business  of  the  deceased 

(a)  Dcnninger  v.  .Miller,  7  App.  Div.  (N.  Y.)  409;  Bank  of  Port 
Jefferson  v.  Darling:,  i)l  Ilun,  2;>(5;  Shoenberger's  Executor  v.  Lan- 
caster Savings  Institution,  L'8  Pa.  St.  459;  Dodson  v.  Taylor,  50 
N.  J.  Law,  11;  Massat-husetts  Bank  v.  Oliver,  10  Gush.  557;  Mer- 
chants' Inuik  V.  l^ircli,  17  John.  24.  See  also  Boyd's  Adnir.  v. 
City  Savings  Bank,  15  Gratt.  501 ;  Smalley  v.  Wright,  40  N.  J. 
Law,  471;  Goodnow  v.  Warren,  122  Mass.  82;  Bealls  v.  Peck,  12 
Barb.  245;  Cayuga  Co.  Bank  i'.  Bennett,  5  Hill,  236;  Maspero 
V.  Pedesclaux,  22  La.  Ann.  227. 

(h)  Goodnow  i'.  Warren,  122  Mass.  82;  Merchants'  Bank  v. 
Birch,  17  Johns.  25;  Lindeman's  Exr.  v.  Guildin,  34  Pa.  3t.  54. 
The  mailing  of  notice  of  dishonor  to  an  indorser  known  to  be 
dead,  directed  to  a  post  office  known  to  be  one  at  which  he  had 
not  received  his  mail  while  living,  is  not  a  good  notice  of  dis- 
honor. ]\Ierchants'  Bank  of  Canada  v.  Brown,  86  App.  Div. 
(X.  Y.)  599. 

§  170.  Notice  to  partners. —  Where  the  parties  to  be  noti- 
fied are  partners,  notice  to  any  one  partner  is  notice  tO'  the 
firm  (a),  even  though  there  has  been  a  dissolution  (b). 

(a)  But  where  partners  give  a  promissory  note  with  one  of 
them  as  maker  and  the  other  as  indorser,  the  latter  is  not  liable 
on  his  indorsement  unless  he  be  duly  notified  of  the  dishonor  of 
the  note.    Poland  v.  Boyd,  23  Pa.  St.  476. 

(h)  Hubbard  v.  Matthews,  54  N.  Y.  43,  50;  Coster  v.  Thomason, 
19  Ala.  717;  Slocomb  v.  Lizardi,  21  La.  Ann.  355;  Fourth  Nat. 
Bank  V.  Henschuh,  52  Mo.  207;  Seldner  v.  Mount  Jackson  Nat. 
Bank,  66  Md.  488. 

§171.  Notice  to  persons  jointly  liable. —  Notice  to  joint 
parties  who  are  not  partners  must  be  given  to  each  of  them, 
unless  one  of  them  has  authority  to  receive  such  notice  for 
the  others  (a). 

(a)  Shepard  v.  Hawley,  1  Conn.  367;  Boyd  v.  Orton,  16  Wis. 
495.     For  the  distinction  between  parties  who  are  partners  and 


NOTICE  OF  DISHONOR.  1-^3 

joint  parties  not  partners,  see  Gates  v.  Beecher,  60  N.  Y.  518,  526, 
See  also  Willis  v.  Green,  5  Hill,  232.  But  see  Sherer  v.  Easton 
Bank,  33  Pa.  St.  134;  Jarnigan  v.  Stratton,  95  Tenn.  619. 

§  172.  Notice  to  bankrupt. —  W  here  a  party  has  been 
adjudged  a  bankrupt  or  an  insolvent,  or  has  made  an  assign- 
ment for  the  benefit  of  creditors,  notice  may  be  given  either 
to  the  party  himself  or  to  his  trustee  or  assignee  (a). 

(a)  In  Callahan  v.  Kentucky  Bank,  82  Ivy.  231,  it  was  decided 
that  where  the  indorser  had  made  a  voluntary  assignment  for  the 
benefit  of  creditors,  notice  to  the  assignee  would  bind  the  indorser 
and  his  estate.  And  a  similar  rule  wag  adopted  by  the  Su- 
preme Court  of  Tennessee  in  American  Nat.  Bank  v.  Junk  Bros., 
94  Tenn.  634.  On  the  other  hand,  the  Supreme  Court  of  Ohio, 
in  House  V.  Vinton,  43  Ohio  St.  E.,  346,  by  a  majority  opinion, 
declined  to  adopt  this  rule,  making  a  distinction  between  an 
assignee  under  a  voluntary  general  assignment  and  an  assignee 
in  bankruptcy.  In  this  latter  case,  however,  there  is  a  strong 
dissenting  opinion  by  two  of  the  judges  of  that  court,  in  which 
the  soundness  of  the  rule  as  announced  by  the  Kentucky  court 
is  earnestly  insisted  upon. 

§  173.  Time  within  which  notice  must  be  given.— Notice/ 
may  be  given  as  soon  as  the  instrument  is  dishonored  (a)  ;S 
and  unless  delay  is*  excused  as  hereinafter  provided,  must/ 
be  given  within  the'times  fixed  by  this  act.  1 

(a)  The  holder  need  not  wait  until  the  close  of  business  hours, 
but  may  send  notice  at  once.  Bank  of  Alexandria  v.  Swan,  9 
Peters,  33;  Lenox  v.  Roberts,  2  Wheat.  373;  ex  parte  Moline,  19 
Ves.  216;  ^^llitwoll  v.  Brigham,  19  Pick.  117;  Coleman  v.  Car- 
penter, 9  Pa.  St.  178. 

§174.  Where  parties  reside  in  same  place.— \\'here  the 
person  giving  and  the  person  to  receive  notice  reside  hi  the 
same  place,  notice  must  be  giveiyWithin  the  following  times/ 

I.  If  given  at  the  place  of  business  of  the  person  to  receive 

X 

.J  0 


1J4  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

notice,  it  niiist  be  given  before  the  close  of  business  hours 
on  the  day  following  (a)  ; 

J.  If  given  at  his  residence,  it  must  be  given  before  the 
usual  hours  of  rest  on  the  day  following  {b)  ; 

3.  If  sent  by  mail,  it  must  be  deposited  in  the  post-offic^, 
in  time  to  reach  him  in  usual  course  on  the  day  follow-* 
ing  (r). 

(0)  Adams  v.  Wright,  14  Wis.  408;  Cayuga  County  Bank  r. 
Hunt,  2  Hill.  236;  Marks  v.  Boone,  24  Fla.  177;  Bell  v.  Hagers- 
town  Bank,  7  Gill,  21G;  Daniel  on  Nog.  Insts.,  section  1038.  The 
notice  must  follow  upon  the  first  demand.  Rosson  v.  Carroll,  90 
Tenn.  90. 

(6)  Phelps  V.  Stocking,  21  Neb.  444;  Darbishire  v.  Parker,  6 
East.  8.  While  service  at  the  place  of  business  must  be 
during  business  hours,  service  at  the  residence  is  not  so  regu- 
lated. It  will  be  sufficient  if  made  during  any  of  the  hours  when_ 
members  of  household  are  attending  to  their  ordinary  affairs^^  Ad- 
amg  v.  Wright,  14  Wis.  408.  If  the  service  is  properly  made : 
at  the  place  of  business  or  residence,  it  is  immaterial  that  the 
party  to  be  notified  did  not  in  fact  receive  the  notice.  Adams  v. 
Wright,  14  Wis.  408. 

(c)   See  note  to  next  section. 

§  175.  Where  parties  reside  in  different  places. — ^  Where 
the  person  giving  and  the  person  to  receive  notice  reside 
in  different  places,  the  notice  must  be  given  within  the  fol- 
lowing times : 

1.  If  sent  by  mail,  it  must  be  deposited  in  the  post-office    \ 
in  time  to  go  by  mail  the  day  following  the  day  of  dishonor,  i 
or  if  there  be  no  mail  at  a'ojnvenient  hour  on  that  day,  by   ', 
the  next  mail  thereafter  (a).  ' 

2.  If  given  otherwise  than  through  the  post-office,  then 
within  the  time  that  notice  would  have  been  received  in  due 
course  of  mail,  if  it  had  been  deposited  in  the  post-office 
within  the  time  specified  in  the  last  subdivision  (&). 

(a)  Sanderson  v.  Sanderi?on,  20  Fla.  292;  Kosson  v.  Carroll,  90 
Tenn.   90;   Stephenson   v.   Dickson,  24   Pa.    St.   148;   Whitwell  v. 


NOTICE   OF   DISHONOR.  12 


0 


Johnson,  17  Mass.  449.  In  Smith  v.  Poillou,  87  N.  Y.  590,  597, 
Earl,  J.,  said :  "  From  a  careful  examination  of  all  these  authori- 
ties and  many  others,  it  is  clear  that  the  law  is  not  precisely 
settled.  It  appears  that  at  iirst  it  was  supposed  to  be  necessary 
that  notice  of  dishonor  should  be  given  by  the  next  post  after 
dishonor,  on  the  same  day,  if  there  was  onej  That  rule  was  found 
inconveniently  stringent,  and  then  it  was  held  that  when  the 
parties  lived  in  different  places,  between  which  there  was  a  mail, 
the  notice  could  be  posted  the  next  day  after  the  dis'houor  or 
notice  of  dishonor.  Some  of  the  authorities  hold  that  the  party^ 
required  to  give  the  notice  may  have  the  whole  of  the  next  day^' 
Some  of  them  hold  that  when  there  are  several  mails  on  the  next 
day,  it  is  sufficient  to  send  the  notice  by  any  post  of  that  day. 
Other  authorities  lay  down  the  rule,  in  general  terms,  that  the 
notice  must  be  posted  by  the  first  practical  and  convenient  mail 
of  the  next  day;  and  that  rule  seems  to  be  supported  by  the  most 
authority  in  this  State.  What  is  a  practical  and  convenient  mail 
depends  upon  circumstances.  It  may  be  controlled  by  the  usages 
of  buijiness  and  the  customs  of  the  people  at  the  place  of  mailing, 
and  the  condition,  situation  and  business  engagements  of  the 
person  required  to  give  the  notice.  The  rule  should  have  a  rea- 
sonable application  in  every  case,  and  whether  sufficient  diligence 
has  been  used  to  mail  the  notice,  the  facts  being  undisputed,  is 
a  question  of  law."  But  see  Burgess  v.  Vreeland,  4  Zab.  (N.  J.) 
71;  Winans  v.  Davis,  3  Harr.  (N.  J.)  276.  Where  it  is  proper  to 
send  the  notice  by  the  mail,  and  it  has  not  arrived  at  as  early  a 
date  as  in  the  regular  course  of  the  mail  it  might  have  come  if 
started  at  the  proper  time,  the  onus  is  upon  the  plaintiff  to  prove 
that  it  was  put  in  the  mail  at  the  proper  time.  Friend  v.  Wil- 
kinson, 9  Gratt.  31. 

(b)  Bank  of  Columbia  v.  Lawrence,  1  Peters,  578;  Jarvis  v. 
St.  Croix  Mfg.  Co.,  23  Me.  287. 

§  176.  When  sender  deemed  to  have  given  due  notice. — 
Where  notice  of  dishonor  is  duly  addressed  and  deposited 
in  the  post-office,  the  sender  is  deemed  to  have  ^ivcn  due 
notice,  notwithstanding-  any  miscarria.s^e  in  the  mails   (a). 

(a)  Wiiidliani  Bank  v.  Norton,  22  Conn.  213;  Pier  v.  TTcinrich- 
soffen,  07  Mo.  103;  Bell  v.  Ilagerstown  Bank,  7  Gill,  216;  Sasscer 


IJO  Tlil::    .NEGOTIABLE   IKSTKUMENTS    LAW. 

V.  Farmers'  Bank,  4  Md.  401);  Cook  v.  Foraker,  193  Pa.  St.  461. 
In  Sheci  v.  Brett.  1  Pick.  401,  410,  it  was  said:  "  The  mail  beinj,' 
established  by  staudiny:  laws  of  tlui  Government  for  the  jjurposc 
principally  of  facilitating  the  transmission  of  mercantile  corre- 
spondence, it  being  by  far  the  most  usual  conveyance  of  letters 
aud  generally  the  most  sure  as  to  time,  and  safe  in  every  other 
respect,  all  men  who  deal  in  mercantile  paper  are  presumed  to 
assent,  and  even  expect,  that  such  information  as  they  may  want 
will  be  communicated  in  this  way.  And  thus  the  post-office  be- 
comes their  agent;  and  if  it  happened  to  fail  from  any  unexpected 
cause,  he  who  made  the  right  use  of  it  by  placing  his  letter  there 
properly  directed  has  done  all  his  duty,  and  the  consequences  must 
fall  upon  him  who  has  to  receive." 

§177.  Deposit  in  post-office;  what  constitutes. —  Notice 
is  deemed  to  have  been  deposited  in  the  post-office  when  de- 
posited in  any  branch  post-office  or  in  any  letter-box  under 
the  control  of  the  post-office  department  (a). 

(a)  See  Nat.  Bank  v.  Shaw,  79  Me.  376 ;  Pearce  v.  Langfit,  101 
Pa.  St.  507;  Johnson  v.  Brown,  154  Mass.  105;  Skilbeck  v.  Gar- 
bett,  7  Q.  B.  846.  In  some  cases  it  hag  been  held  that  delivery  to 
a  letter  carrier  was  sufficient.  Pearce  v.  Langfit,  101  Pa.  St.  507; 
Shoemaker  v.  Mechanics'  Bank,  59  Pa.  St.  79.  But  it  was  not 
deemed  wise  to  adopt  this  rule  in  the  statute. 

§178.  Notice  to  subsequent"''  party;  time  of. —  Where  a 
party  receives  notice  of  dishonor,  he  has,  after  the  receipt 
of  such  notice,  the  same  time  for  giving  notice  to^ntecedent 
parties  that  the  holder  has  after  the  dishonor]  (a). 

(a)  Howland  v.  Adrian,  29  N.  J.  Law,  41 ;  Howard  v.  Ives,  1 
Hill,  263;  Jameson  v.  Swinton,  2  Taunt.  224;  Shelburne  Falls 
National  Bank  v.  Townsley,  102  Mass.  177;  Seaton  v.  Scovill.  18 
Kans.  435;  Haly  v.  Brown,  5  Pa.  St.  178;  Etting  v.  Schuylkill 
Bank,  2  Pa.  St.  3.55;  Struthers  v.  Blake,  30  Pa.  St.  139;  Bray  v. 
Hadwen,  5  Maule  &  Sel.  68;  Linn  v.  Horton,  17  Wis.  150.  If 
the  holder  of  an  indorsed  bill  or  noje  chooses  to  rely  upon  the 

*  Error  in  egrossing.    The  word  should  be  "  antecedent." 


ts. 


NOTICE   OF   DISHONOR.  12/ 

responsibility  of  his  immediate  indorser,  there  is  no  necessity  for 
his  giving  notice  to  any  previous  party;  and  if  such  notice  be 
properly  given  in  time,  by  the  other  parties,  it  will  enure  to  the 
benefit  of  the  holder  and  he  may  recover  thereon  against  any  of 
them.  Thus,  if  the  holder  notifies  the  sixth  indorser,  and  he  the 
fifth,  and  so  on  to  the  first,  the  latter  will  be  liable  to  all  the 
parties.  And  it  is  no  objection  to  such  notice  that  it  is  not  in 
fact  received  so  soon  as  the  first  or  any  prior  indorser,  as  if  it 
had  been  transmitted  directly  by  the  holder  or  notary,  provided 
it  has  been  seasonably  sent  by  each  indorser  as  he  received  it. 
Colt  V.  Noble,  5  Mass.  167;  Mead  v.  Engs,  5  Cow.  303;  Howard  v. 
Ives,  1  Hill,  263.  And  the  same  degree  of  diligence  must  be  ex- 
ercised on  the  part  of  the  indorser  in  forwarding  notice  as  is  re- 
quired of  the  holder.  Ordinary  diligence  must  be  used  in  both 
cases.  He  is  not  bound  to  forward  notice  on  the  very  day  upon 
which  he  receives  it,  but  may  wait  until  the  next.  See  cases  above 
cited.  Service  of  notice  upon  an  antecedent  party  is  not  shown 
by  the  mere  testimony  of  the  notary  that  not  knowing  the  ad- 
dress of  the  indorser  he  inclosed  the  notice  of  dishonor  to  a  sub- 
sequent indorser  with  postage  for  forwarding  the  same  to  the 
prior  indorser.  Fuller  Bugg^^  Co.  v.  Waldron,  112  App.  Div. 
(N.  Y.)  814.  The  holder  of  a  check  indorsed  and  deposited  the 
same  in  his  bank  for  collection  on  July  28th.  On  July  29th,  he 
was  notified  by  the  bank  that  the  check  had  been  dishonored,  and 
on  July  30th,  he  notified  the  payee  by  telegraph :  — 7/eW,  that  the 
notice  wag  in  due  time  under  this  section.  Jurgens  v.  Wichmann, 
108  N.  Y.  Supp.  881. 

§179.  Where  notice  must  be  sent. —  Where  a  party  lias 
added  an  address  to  his  signature,  notice  of  dishonor  must 
be  sent  to  that  address  (a)  ;  but  if  he  has  not  given  such 
address,  tlien  the  notice  must  be  sent  as  follows: 

1.  I'litlier  to  the  post-office  nearest  to  his  place  oi  resi- 
dence, or  to  the  iwst-office  wliere  he  is  accustomed  to  receive 
his  letters  (h)  ;  or 

2.  If  he  h'vc  in  one  place,  nnd  have  his  place  of  business 
in  another,  n(jtice  may  be  sent  to  cither  place  (r)  ;  or 

3.  Tf  he  is  sojourning  in  annther  place,  notice  may  be  sent 
to  the  place  where  he  is  so  soj<»iirning  (d). 


1_'S  THE    NEGOTlABLli    INSTRUMENTS    LAW. 

lUit   where  the  notice  is  acUially  received  by  the  party  j 
within  the  time  specilied  in   this  act,   it   will  be  sufficient,/ 
though  not  sent  in  accordance  with  the  requirements  of  this 
section  i^c). 

(a)  Bartlett  v.  Robinson.  39  N.  Y.  187.  In  this  case  the  in- 
dorsement was  in  the  following  form:  "  Chas.  Kobinson,  214  E. 
ISth  Street."  The  notice  of  dishonor  sent  through  the  post-office 
was  addressed  "  Chas.  Robinson,  Esq.,  City  of  New  York,"  and 
was  not  received  by  the  indorser.     Held,  that  he  was  discharged. 

(h)  Bank  of  Columbia  v.  Lawrence,  1  Peters,  578;  National 
Bank  v.  Cade,  73  Mich.  441);  Northwestern  Coal  Co.  v.  Bowman, 
GO  Iowa  150;  Mercer  t'.  Lancaster,  5  Pa.  St.  160;  Woods  v.  Neeld, 
44  Pa.  St.  86;  Haly  v.  Brown,  5  Pa.  St.  178;  Rand  v.  Reynolds,  2 
Gratt.  171.  But  if  sufficient  inquiries  have  been  made,  and  in- 
formation received  on  which  the  holder  has  a  right  to  rely,  a 
mistake  as  to  the  nearest  or  usual  post-office  does  not  release  the 
indorser.  Moore  v.  Ilardeastle,  11  Md.  486.  For  a  case  where  the 
indorser  received  his  mail  at  two  post-offices,  see  Shelburne  Falls 
Nat.  Bank  v.  Townsley,  107  Mass.  444.  A  notice  addressed  to 
the  indorser  at  "  New  York "  is  insufficient  where  there  is  no 
evidence  that  he  lived,  ever  had  lived,  or  was  sojourning  in  New 
York,  and  no  inquiry  was  made  to  ascertain  whether  such  was 
the  fact.     Fonseca  v.  Hartman,  84  N.  Y.  Supp.  131. 

(c)  Bank  of  U.  S.  v.  Carneal,  2  Peters,  549;  Williams  v.  Bank 
of  U.  S.,  2  Peters,  96;  Montgomery  Co.  Bank  v.  Marsh,  7  N.  Y. 
481.  The  rule  that  notice  might  be  served  at  the  place  of  busi- 
ness, as  well  as  at  the  residence,  was  not  changed  by  the  former 
statute  of  Wisconsin,  Laws  18G1,  Ch.  79.  Simus  v.  Larkin,  19 
Wis.  390. 

(d)  Chouteau  v.  Webster,  6  Mete.  1;  Young  v.  Durgin,  15  Gray, 
264;  Bigley's  Adm'r  v.  CluflF,  16  Gratt.  284,  291-292.  The  stabil- 
ity of  residence  acquired  under  laws  relating  to  taxation  and  the 
settlement  of  paupers  is  not  necessary  when  ascertaining  the 
abode  of  an  indorser  for  the  purpose  of  giving  him  notice  of 
dishonor  by  mail.  He  may  have  a  residence  for  this  purpose  at 
two  places  at  the  same  time,  and,  in  such  case,  notice  to  him  at 
either  place  will  be  sufficient.  Lowell  Trust  Company  v.  Pratt, 
183  Mass.  379,  381. 

(e)  Although  the  residence  or  place  of  business  is  the  usual  and 


NOTICE   OF   DISHONOR.  I29 

proper  place  for  giving  notice,  it  will  be  good  if  actually  given 
anywhere.  Dickens  v.  Hall,  87  Pa.  St.  379,  380.  If  the  party  to 
be  charged  receives  the  notice  in  due  time  he  cannot  object  to 
the  means  employed.  Terbell  v.  Jones,  15  Wis.  235;  Whitford  v. 
Burckmeyer,  1  Gill,  127.  But  if  the  holder  employs  other  means 
than  the  mail  he  does  so  at  his  own  risk.  (Id.)  Notice  sent  by 
telegraph,  for  example,  would  undoubtedly  be  sufficient  if  actually 
received,  and  an  omission  to  post  the  notice  in  due  season  might 
be  corrected  in  this  way.     See  section  175. 

§180.  Waiver  of  notice. —  Notice  of   dishonor  may  be  ^jSo^V-"**^ 

waived,  either  before  the  time  of  giving  notice  has  arrived  ^  t-«v-*^*^ 

or  after  the  omission  to  give  due  noticej(a),  and  the  waiver  "Tj^ 
may  be  express  or  implied  (b). 

(a)  Robinson  v.  Barnett,  19  Fla.  670.  The  statute  has  not 
changed  the  law  respecting  waiver.  First  Nat.  Bank  v.  Gridley, 
112  App.  Div.  (N.  Y.)  398.  If  an  indorser  with  full  knowledge 
of  the  laches  of  the  holder  in  neglecting  to  protest  a  bill  or  note, 
unequivocally  assents  to  continue  his  liability,  or  to  be  respon- 
sible, as  though  due  protest  had  been  made,  he  is  held  to  have 
waived  the  right  to  object,  and  will  stand  in  the  same  position 
as  if  he  had  been  regularly  charged  by  presentment,  demand  and 
notice.  This  assent  must  be  clearly  established,  and  will  not  be 
inferred  from  doubtful  or  equivocal  acts  or  language.  It  has  been" 
fro(iuently  hold  that  a  promise  by  the  indorser  to  pay  the  note  or 
bill,  after  he  has  been  discharged  by  the  failure  to  protect  it,  will 
bind  the  indorser,  provided  he  had  full  knowledge  of  the  laches 
when  the  promise  was  made.  A  promise  made  under  those  cir- 
cumstances affords  the  clearest  evidence  that  the  indorser  does 
not  intend  to  take  advantage  of  the  laches  of  the  holder;  and 
the  law,  without  any  new  consideration  moving  between  the  par- 
ties, gives  effect  to  the  promise.  The  assent  of  the  indorser  to 
be  bound,  notwithstanding  he  has  not  been  duly  charged,  may  be 
established  by  any  transaction  between  him  and  the  holder,  which 
clearly  indicates  this  purpose  and  intention.  Ross  v.  TTurd,  71 
N.  Y.  14.  18;  Turnbull  v.  Mad.lnx.  (\H  "Md.  579;  Lewis  r.  Brehmo. 
33  Md.  412;  Bank  v.  Dibbrcll,  91  Tenn.  301;  Low  v.  Howard,  10 
Cush.  159;  Smith  v.  Tyownsdalo,  6  Oregon  78;  Whittaker  v.  Mor- 
rison, 1  Fla.  25.     But  it  must  appear  in  such  case  that  the  in- 

9 


130  THE    NEGOTIAULE   INSTRUMENTS    LAW. 

dorser  Lad  knowledge  of  the  fact  that  the  holder  was  in  default. 
Thornton  r.  Wyi.u,  IJ  Wlual.  \s:',;  Hunter  ;■.  ll.uik,  C.l  liarb.  4Gi); 
Sawtry  v.  Doanc,  4S  Jiarb.  148;  Schierl  r.  Hauiiiel,  75  Wis.  75; 
Glaser  v.  Ivounds.  10  K.  1.  235;  Aebi  v.  Bank  of  Evansville,  124 
Wis.  73,  81.  And  in  Massachusetts  it  is  held  that  knowledge  on 
the  part  of  an  indorser  that  demand  upon  the  nuiker  has  not  been 
made  is  material,  and  niut?t  be  proved,  notwithstanding  the  fact 
that  he  knew  that  the  note  had  not  been  paid  and  that  notice  of 
non-payment  had  not  been  given,  and  was  aware  that  he  was 
discharged  from  all  liability.  Parks  v.  Smith,  155  Mass.  20,  33; 
Garland  v.  Salem  Bank,  9  Mass.  408;  Low  v.  Howard,  10  Cush. 
159;  S.  C,  11  Cush.  208;  Kelley  v.  Brown,  5  Gray,  108.  But 
where  the  indorser  is  fully  apprised  of  the  facts,  he  is  bound  by 
the  waiver,  though  made  in  ignorance  of  its  legal  effect.  Toole  v. 
Crafts,  193  Mass.  110.  Under  the  statute,  as  before,  where 
presentment  for  payment  is  waived  notice  of  dishonor  is  dis- 
pensed with.  Baumeister  v.  Kuntz  (Fla.),  42  So.  Kep.  880;  Dye 
V.  Scott,  35  Ohio  St.  194. 

(h)  Jenkins  v.  White,  147  Pa.  St.  303.  A  waiver  will  not  be 
presumed  without  the  most  satisfactory  proof.  Lockwood  v. 
Crawford,  18  Conn.  374.  But  it  is  not  essential  that  the  waiver 
be  in  writing.  When  the  fact  is  established  by  competent  evi- 
dence, a  parol  waiver  is  ag  valid  and  binding  as  a  written  one. 
The  only  difference  is  in  the  character  of  the  proof.  Annville 
National  Bank  v.  Kettering,  100  Pa.  St.  531,  534.  A  part  pay- 
ment of  a  note  by  an  indorser,  not  explained  or  qualified  by  any 
accompanying  circumstances,  will  be  held  to  be  sufficient  evidence 
of  waiver  of  notice.  Whittaker  v.  Morrison,  1  Fla.  25.  As  to 
whether  an  indorser  who  has  taken  sufficient  security  to  protect 
himself  against  possible  loss  waives  his  legal  right  to  require 
proof  of  demand  and  notice,  the  authorities  are  not  agreed. 
Smith  V.  Lownsdale,  0  Ore.  78;  Haskell  v.  Boardman,  8  Allen,  38; 
Moore  V.  Alexander,  03  App.  Div.  100;  Mechanics'  Bank  v.  Gris- 
wold,  7  Wend.  105;  Brown  v.  Maffey,  15  East.  222.  As  to  when 
question  of  waiver  is  for  the  jury,  see  Valley  Nat.  Bank  v. 
Uhler,  191  Pa.  St.  356;  Jones  v.  Eoberts,  191  Pa.  St.  152.  The 
facts  constituting  the  waiver  must  be  alleged  in  the  pleading. 
Congress  Brewing  Co.  v.  Ilabenicht,  83  App.  Div.  (N.  Y.)  141. 

§  181.  Whom  affected  by  waiver. —  Where  the  waiver  is 
embodied  in  the  instruinent  itself,  it  is  binding  upon  all  par- 


NOTICE   OF   DISHONOR.  I3I 

ties  (a)  ;  but  where  it  is  written  above  the  signature  of  an 
indorser,  it  binds  him  only  {b). 

(a)  Phillips  V.  Dippo,  93  Iowa  35;  Smith  v.  Pickliam,  8  Tex. 
Civ.  App.  326;  Bryant  v.  Merchants'  Bank,  8  Bush.  43;  Lowry  v. 
Steele,  27  Ind.  168;  Farmers'  Bank  of  Kentucky  v.  Ewing,  78 
Ky.  264;  Bryant  v.  Taylor,  19  Minn.  396. 

(b)  Woodman  v.  Thurston,  8  Cush.  157;  Farmers'  Bank  v. 
Ewing,  78  Ky.  264. 

§  182.  Waiver  of  protest.— A  waiver  of  protest,  whether 
in  the  case  of  a  foreign  bill  of  exchange  or  other  negotiable 
instrument,  is  deemed  to  be  a  waiver  not  only  of  a  formal 
protest,  but  also  of  presentment  and  notice  of  dishonor  (a). 

(a)  First  Nat.  Bank  v.  Falkenham,  94  Cal.  141.  While  in  a 
strict  and  technical  sense  the  term  protest  when  used  in  reference 
to  commercial  paper  means  only  the  formal  declaration  drawn  up 
and  signed  by  a  notary ;  yet  in  a  popular  sense,  and  as  used  among 
men  of  business,  it  includes  all  the  steps  necessary  to  charge  an 
indorser;  and  in  waiving  protest  an  indorser  is  supposed  to  use 
in  it  this  sense.  Coddington  v.  Davis,  1  N.  Y.  186,  189-190; 
Annville  Nat.  Bank  v.  Kettering,  106  Pa.  St.  531;  First  Nat. 
Bank  V.  Schreiner,  110  Pa.  St.  188;  Continent  Life  Ins.  Co.  v. 
Barber,  50  Conn.  567;  Brewster  v.  Arnold.  1  Wis.  264;  Wilkie  v. 
Cliandon,  1  Wash.  355.  But  the  waiver  will  not  be  extended 
beyond  the  fair  import  of  the  terms;  and  hence,  a  waiver  of 
"notice  of  protest"  will  not  be  deemed  a  waiver  of  demand. 
Spraguo  V.  Fletcher,  8  Oregon  367.  In  construing  a  pleading  a 
more  technical  rule  will  be  applied,  and  an  allegation  that  the 
instrument  was  duly  protested  will  not  be  held  to  comprehend 
an  averment  that  notice  of  dishonor  was  given  to  the  indorser. 
Cook  V.  Warren,  88  N.  Y.  37. 

§  183.  When  notice  is  dispensed  with. —  Notice  of  dis- 
honor (a)  is  dispensed  with  when,  after  the  exercise  of  rea- 
sonable diligence,  it  cannot  be  given  to  or  does  not  reach 
the  parties  sought  in  be  charged  (b). 

(a)  The  fact  that  the  holder  is  excused  from  making  present- 
ment for  payment  under  section  136  because  tin-  princiyml  obligor 


13-  THE    NEGOTIABLE    INSTRUMENTS    LAW. 

is  ili-ail,  does  not  roliovc  him  from  the  duty  of  niviiif?  notice  of 
dishonor  to  tlie  indorsor.  lii'cd  v.  Spt'iir,  IdT  App.  l)iv.  (N.  Y.) 
144. 

(ft)  Ilobbs  I'.  Straine,  149  Mass,  212;  Staylor  v.  Ball,  24  Md. 
183:  Reed  v.  Spear,  107  App.  Div.  (N.  Y.)  144;  Fonseca  v.  Hart- 
man,  84  N.  Y.  Supp.  131;  Siet-el  v.  Dubinsky,  50  Misc.  (N.  Y.) 
081.  Reasonable  diligence  is  all  that  is  required.  The  law  does 
not  exact  every  possible  exertion  which  might  have  been  made  to 
effect  notice  of  the  dishonor  of  the  jniper.  Bank  of  Port  Jefferson 
V.  Darling,  91  Hun,  230.  But,  as  said  by  Lord  Kllenborough,  the 
holder  cannot  allow  himself  to  remain  "  in  a  state  of  passive  and 
contented  ignorance."  Bateman  v.  Joseph,  2  Campb.  401.  What  "N 
is  reasonable  diligence  will  dei)end  upon  the  circumstances  of  each 
case.  What  would  be  sutHcient  in  one  case  might  fall  short  in 
another.  Howland  v.  Adrian,  29  N.  J.  Law,  41.  And  any  mode 
of  inquiry  will  be  sufficient  which  under  the  circumstances  of  the 
case  evinces  reasonable  diligence.  Hartford  Bank  v.  Stedman,  3 
Conn.  494.  But  bare  reliance  upon  a  directory  is  not  sufficient. 
Bacon  v.  Hanna,  137  N.  Y.  379,  382.  In  the  case  last  cited,  the 
court  said :  "  Merely  looking  into  a  directory  is  not  enough.  The 
sources  of  error  in  that  process  are  too  many  and  too  great.  Such 
books  are  accurate  enough  in  a  general  way,  and  convenient  as 
an  aid  or  assistance,  but  they  are  private  ventures,  created  by 
irresponsible  parties,  and  depending  upon  information  gathered 
as  cheaply  as  possible  and  by  unknown  agents.  Their  help  may 
be  invoked,  but,  as  was  said  in  Lawrence  v.  Miller,  16  N.  Y.  231, 
their  error  may  excuse  the  notary,  but  wiU  not  charge  the  defend- 
ant. Merely  consulting  them  should  not  be  deemed  Hhe  best 
information  obtained  by  diligent  inquiry.'  Greenwich  Bank  v. 
DeGroot,  7  Hun,  210;  Baer  v.  Leppert,  12  Hun,  510."  If  the 
holder  is  ignorant  of  the  address  he  should  apply  to  the  other 
parties  to  the  instrument  for  information.  University  Press  v. 
Williams,  48  App.  Div.  (N.  Y.)  190.  When  a  notary  is  employed, 
it  is  the  duty  of  the  holder  to  inform  him  of  the  indorser's  place 
of  residence;  and  if  this  be  omitted,  the  notary  ought  to  apply 
to  all  the  parties  to  the  instrument  for  information,  and  espe- 
cially to  the  holder  himself.  Hill  v.  Farrell,  3  Greenleaf ,  233 ;  Ilaly 
V.  Brown,  5  Pa.  St.  178,  182;  Tate  v.  Sullivan,  30  Md.  404;  Stay- 
lor V.  Ball  &  Williams,  24  Md.  183.  But  as  the  duty  to  give 
notice,  and  therefore  the  duty  of  due  diligence  to  discover  the 
residence  of  the  indorser,  arises  subsequently  to  the  dishonor  of 


NOTICE   OF   DISHONOR.  133 

the  note,  it  is  not  an  element  of  due  diligence  that  the  owner 
should  previously  have  communicated  his  knowledge  of  the  in- 
dorser's  residence  to  the  holder  for  collection.  Bartlett  v.  Isbell, 
31  Conn.  297.  Where  it  does  not  appear  that  the  residence  of 
the  indorser  has  been  changed  previously  to  the  time  of  sending 
the  notice,  it  will  be  presumed  that  there  has  been  no  change  of 
residence  up  to  that  time.  Mohlman  Co.  v.  McKane,  60  App. 
Div.  546  (a  case  arising  under  the  statute).  Where  the  facts  are 
undisputed  the  question  of  due  diligence  in  seeking  to  give  notice 
of  dishonor  is  for  the  court.    Haly  v.  Brown,  5  Pa.  St.  178. 

§184.  Delay  in  giving  notice;  how  excused. —  Delay  in 
giving  notice  of  dishonor  is  excused  when  the  dela>MS  caused 
by  circumstances  beyond  the  control  of  the  holder  and  not 
imputable  to  his  default,  misconduct  or  negligence.  When 
the  cause  of  delay  ceases  to  operate,  notice  must  be  given 
with  reasonable  diligence  (a). 

(a)  In  Martin  v.  Ingersoll,  8  Pick.  1,  the  delay  was  caused  by 
the  fact  that  during  the  Christmas  holidays  vessels  were  not  al- 
lowed to  clear  from  Havana.  Held,  that  during  the  continuance 
of  the  holidays  it  was  not  -necessary  to  write  a  notice  of  the 
dishonor  of  a  bill. 

§  185.  When  notice  need  not  be  given  to  drawer.— 
Notice  of  dishonor  is  not  required  to  be  given  to  the  drawer 
in  either  of  the  following  cases: 

1.  Where  the  drawer  and  drawee  are. the  same  person 

2.  Where  the  drawee  is  a  fictitious  person  or  a  person 
not  having  capacity  to  contracT; 

3.  Where  the  drawerls  the  person  to  whom  the  instru- 
ment is  presented  for  payment; 

4.  Where  the  drawer  has  no  riglit  to  expect  or  require 
that  the  drawee  or  acceptor  will  honor  the  instrument  (b)  \ 

5.  Where  the  drawer  has  countermanded  payment. 

(a)  Roach  v.  Ostlrr.  1  Man.  &  Rv.  120;  Pbintors'  'Rauk  V. 
Evans,  36  Tex.  r,'.)2\  Chicago,  etc.  P.  P.  Co.  r.  West,  37  Ind.  211. 


1^4  ''"1'    NliCOTIAlU.K    IXSTKl'MENTS    LAW. 

Wlion  tlio  drawer  and  the  draweo  are  the  same  in  contemplation 
of  h\\v,  the  rule  applieahlo  to  such  draft  is,  that  in  legal  operation 
it  is  regarded  as  a  promissory  note,  payable  on  demand,  and  the 
maker  thei*eof  is  not  entitled  to  notice.  Bailey  v-  Southwestern 
li.  Iv.  Bank,  11  Fla.  26G.  Notice  is  not  reiiuired  to  render  a  firm 
liable  where  all  the  members  of  the  firm  are  members  of  the 
house  which  drew  the  bill.  West  Branch  Bank  v.  Fulner,  3  Pa, 
St.   399. 

(fc)  Life  Insurance  Compa-ny  v.  Pendleton,  112  U.  S.  708;  Wol- 
lenweber  v.  Ketterlinn,  17  Pa.  St.  389.  Although  the  drawer  has 
no  funds  in  the  hands  of  the  drawee,  yet  if  he  has  a  right  to 
expect  to  have  funds  in  the  hands  of  the  drawee  to  meet  the  bill, 
or  if  he  has  a  right  to  expect  the  bill  to  be  accepted  by  the 
drawee  in  consequence  of  an  agreement  or  an  arrangement  with 
him,  or  if  upon  taking  up  the  bill  he  would  be  entitled  to  sue  the 
drawee  or  any  other  party  to  the  bill,  then  in  every  such  case  he 
is  entitled  to  strict  notice  of  dishonor,    Pitts  v.  Jones,  9  Fla.  519. 

§  i86.  When  notice  need  not  be  given  to  indorser. — 
Notice  of  dishonor  is  not  required  to  be  given  to  an  in- 
dorser in  either  of  the  following-  cases : 

1.  Where  the  drawee  is  a  fictitious  person  or  a  person 
not  having  capacity  to  contract,  and  the  indorser  was  aware 
of  the  fact  at  the  time  he  indorsed  the  instrument  (a). 

2.  Where  the  indorser  is  the  person  to  whom  the  instru- 
ment is  presented  for  payment  (b)  ; 

3.  Where  the  instrument  was  made  or  accepted  for  his 
accommodation   (c). 

(a)   See  note  to  section  28. 

(6)  In  re  Swift,  106  Fed.  Rep.  65  (a  case  arising  under  the 
statute). 

(c)  French  v.  Bank  of  Columbia,  4  Cranch,  141;  Ross  v.  Bedell, 
5  Duer,  462;  Blenderman  v.  Price,  50  N.  J.  L.  296;  Torrey  v. 
Frost,  40  Me.  74.  Where  one,  as  indorser,  procures  the  note  of 
another  to  be  discounted  by  a  bank  for  his  credit,  and  at  the 
time  the  discount  is  effected  makes  a  distinct  promise  to  the  bank 
to  pay  the  note  at  maturity,  his  liability  is  absolute,  not  condi- 


A 


NOTICE   OF   DISHONOR.  135 

tional,  and  protest  and  notice  of  non-payment  are  unnecessary. 
Sieger  v.  Second  National  Bank,  132  Pa.  St.  307. 

§  187.  Notice  of  non-payment  where  acceptance  refused. 
—  Where  due  notice  of  dishonor  by  non-acceptance  has 
been  given,  notice  of  a  subsequent  dishonor  by  non-pay- 
ment is  not  necessary,  unless  in  the  meantime  the  instru- 
ment has  been  accepted  (a). 

(a)  De  la  Torre  v.  Barclay,  1  Stark,  308;  Campbell  v.  French, 
6  T.  K.  200. 

§  188.  Effect  of  omission  to  give  notice  of  non-accept- 
ance.— An  omission  to  give  notice  of  dishonor  by  non- 
acceptance  does  not  prejudice  the  rights  of  a  holder  in  due 
course  subsequent  to  the  omission. 

§  189.  When  protest  need  not  be  made;  when  must  be 
made. —  Where  any  negotiable  instrument  has  been  dis- 
honored it  may  be  protested  for  non-acceptance  or  non- 
payment, as  the  case  may  be;  but  protest  is  not  required, 
except  in  the  case  of  foreign  bills  of  exchange  (a). 

(a)  Bay  v.  Church,  15  Conn.  129;  Lcgg  v.  Vinal,  165  Mass. 
555;  Tate  v.  Sullivan,  30  Md.  464;  Weems  v.  Farmers'  Bank,  15 
Md.  231;  Ricketts  v.  Pendleton,  14  Md.  320;  Sumner  v.  Kimball, 
2  Wis.  524;  Stephenson  v.  Dickgon,  24  Pa.  St.  148.  Under  this 
sectian  the  drawer  of  a  foreign  bill  is  discharged  unless  the  bill 
be  protested.  Amsinck  v.  Rogers,  189  N.  Y.  252 ;  S.  C,  103  App. 
Div.  428.  While  protest  is  not  necessary,  except  in  case  of  for- 
eign bills,  it  is  very  convenient  in  all  cases,  because  it  aflfords  the 
easiest  and  most  certain  method  of  proving  the  fact  of  dishonor 
and  the  notice  to  the  indorsors.  Under  the  statutes  of  nearly  all, 
if  ncjt  all  of  the  States,  the  certificate  of  the  notary  making  the 
protest  is  prima  facie  evidence  of  these  facts.  As  to  what  are 
foreign  bills,  see  section  213.  For  other  provisions  relative  to 
protest,  see  sections  200-268. 


136  THE    NEGOTIABLE    INSTRUMENTS    LAW. 

ARTICLE  IX. 
Discharge  of  Negotiable  Instruments. 

Section  200.  Instrument;  how  discharged. 

201.  When  i>erson  secondarily  hable  on,  discharged. 

202.  Right  of  party  who  discharges  instrument. 

203.  Renunciation  by  holder. 

204.  Cancellation ;  unintentional ;  burden  of  proof. 

205.  Alteration  of  instrument ;  effect  of. 

206.  What  constitutes  a  material  alteration. 

§  200.  Instrument ;  how  discharged.*—  A  negotiable  in- 
strument is  discharged : 

1.  By  payment  (a)  in  due  course  by  or  on  behalf  of  the 
principal  debtor  (b)  ; 

2.  By  payment  in  due  course  by  the  party  accommodated, 
where  the  instrument  is  made  or  accepted  for  accommoda- 
tion; 

3.  By  the  intentional  cancellation  thereof  by  the  holder 

(0; 

4.  By  any  other  act  which  will  discharge  a  simple  con- 
tract for  the  payment  of  money  (d)  ; 

5.  W'hen  the  principal  debtor  becomes  the  holder  of  the 
instrument  at  or  after  maturity  in  his  own  right  (e). 

(a)  The  possession  of  a  bill  of  exchange  by  the  acceptor  after 
it  has  been  in  circulation  is  prima  facie  evidence  that  it  has  been 
paid  by  him.  Baring  v.  Clark,  19  Pick.  220.  So  tlie  possession 
of  a  promissory  note  by  the  maker.  First  Nat.  Bank  v.  Harris, 
7  Wash.  139;  Perez  v.  Bank  of  Key  West,  36  Fla.  407.     But  see 

*  Through  an  error  in  engrossing  the  words  in  the  headnote  have 
been  transposed.  It  was  intended  to  read.  "  How  instrument  dis- 
charged."    The  error  was  not  corrected  by  the  Act  of  i8g8. 


DISCHARGE   OF    NEGOTIABLE   INSTRUMENTS.  I37 

Miller  i;.  Kreiter,  76  Pa.  St.  78;  Eckert  v.  Cameron,  7  Wright, 
120.  When  the  holder  of  a  bill  of  exchange,  accepted  for  the  ac- 
commodation of  the  drawer,  sends  it  to  a  bank  for  collection,  and 
the  bank,  when  the  bill  comes  to  maturity,  pays  the  amount  thereof 
to  the  credit  of  the  holder,  this  is  not  such  a  payment  as  dis- 
charges the  acceptor;  but  the  bank  succeeds  to  the  right  of  the 
holder,  and  may  maintain  an  action  on  the  bill  against  the  ac- 
ceptor. Pacific  Bank  v.  Mitchell,  9  Met.  297.  The  surrender  of  a 
genuine  note  of  a  town  in  exchange  for  an  instrument  purjKjrting 
to  be  a  renewal  note  forged  by  the  treasurer  of  the  town  does 
not  extinguish  the  surrendered  note,  which,  although  not  to  be 
found,  still  can  be  sued  upon  by  the  holder  thus  induced  to  give 
it  up.  Bass  V.  Inhabitants  of  Wellesley,  192  Mass.  526.  Where 
the  defendant  admits  the  execution  of  a  note,  the  burden  of  show- 
ing payment  is  on  him.     Guano  Company  v.  Marks,  135  N.  C.  59. 

(h)  A  payment  made  to  the  holder  of  a  promissory  note  by  an 
indorser,  not  as  agent  for  the  maker,  but  simply  in  discharge  of 
his  obligation  as  indorser,  where  the  note  was  executed  by  the 
maker  for  value,  does  not  enure  to  the  benefit  of  the  latter,  and  in 
an  action  upon  th(;  note  he  is  liable  for  the  whole  amount  thereof, 
notwithstanding  the  payment.  Madison  Square  Bank  v.  Pierce, 
137  N.  Y.  444.  In  the  case  cited  it  was  said:  "To  the  extent  of 
the  money  paid,  the  indorser  becomes  equitably  entitled  to  be  sub- 
stituted to  the  rights  and  remedies  of  the  holder,  and  becomes, 
pro  tanto,  the  beneficial  owner  of  the  debt;  so  that  the  maker's 
obligation  to  pay  the  note  in  full,  at  first  due  the  holder  solely 
in  his  own  right,  becomes,  after  the  part  payment  by  the  indor^^or, 
still  wholly  due  to  the  holder,  but  partly  in  his  own  right  and 
partly  as  trustee  for  the  indorser.  A  court  of  law  cannot  split 
the  note  into  parts,  and  must  act  upon  the  legal  interest  and 
ownership."  For  cases  where  payment  made  by  person  secondarily 
liable,  see  section  202. 

(c)   See  section  204. 

{d)  Thus,  the  release  of  one  joint  maker  will  operate  to  dis- / 
charge  the  otlicr  joint  parties.  Crawford  v.  Roberts,  8  Oregon  r 
324.  l>ut  to  have  this  eifccit  the  release  must  be  under  seal.  | 
Shaw  V.  Pratt,  22  Pick.  305. 

(e)  Statute  ayiplicd  in  Schwartzinan  v.  Post,  94  A]))),  l^iv. 
(N.  Y.)  474,  477.  The  words  "  in  his  own  riglit  "  merely  exclndo 
such  a  case  as  that  of  a  maker  acquiring  the  instrument  in  a 


I3S  THE    NEGOTIABLE    INSTRUMENTS    LAW. 

purely  ropresojitativo  capju-ity.  (/(/.)  If  he  sliould  become  the 
holder  in  a  representative  capacity,  for  example,  as  executor,  the 
instrument  would  not  be  discharged.  Nash  v.  DeFreville  (1900), 
'2  Q.  H.  72.     See  section  80. 

§  201.  When  persons  secondarily  liable  on,  discharged. 
— A  person  secondarily  liable  on  the  instrument  is  dis- 
charged : 

1.  By  any  act  which  discharges  the  instrument; 

2.  By  the  intentional  cancellation  of  his  signature  by  the 
holder ; 

3.  By  the  discharge  of  a  prior  party  (o)  ; 

4.  By  a  valid  tender  of  payment  made  by  a  prior  party 

5.  By  a  release  of  the  principal  debtor,  unless  the  holder's 
right  of  recourse  against  the  party  secondarily  liable  is  ex- 
pressly reserved  (c)  ; 

6.  By  any  agreement  binding  upon  the  holder  to  extend 
the  time  of  payment  or  to  postpone  the  holder's  right  to 
enforce  the  instrument*  (d),  unless  the  right  of  recourse 
against  such  party  is  expressly  reserved  (c). 

(a)  Shutts  V.  Fingar,  100  N.  Y.  539;  Spies  v.  National  City 
Bank,  174  N.  Y.  222 ;  Couch  v.  Waring,  9  Conn.  261 ;  Gennis  v. 
Weighley,  114  Pa.  St.  194.  It  is  a  general  rule  that  whatever  dis- 
charges the  maker  or  acceptor  discharges  the  drawer  and  in- 
dorser,  who  are  sureties,  for  the  contract  which  they  under- 
took to  assume  thus  passes  out  of  existence  by  the  act  of 
the  beneficiary.  And  whatever  discharges  a  prior  indorser 
discharges  all  subsequent  indorsers,  for  the  reason  that  he 
stood  between  them  and  the  holder,  and  on  making  payment 
each  one  could  have  had  recourse  against  him,  but  from  which 
his  discharge  precludes  them.  The  contracts  of  the  parties  are 
said  to  be  like  the  links  of  a  pendant  chain;  if  the  holder  dissolves 


*  By  an  error  in  engrossing,  the  words  *'  unless  made  with  the  assent 
of  the  party  secondarily  liable,  or"  after  the  word  "  instrument  "  are 
omitted  in  the  New  York  Act.  They  were  not  supplied  by  Laws  1898, 
Chap.  336.  These  words  are  included  in  the  section  as  passed  in  all 
the  other  states. 


DISCHARGE   OF    NEGOTIABLE   INSTRUMENTS.  1 39 

the  first,  every  link  falls  with  it.     Shutts  v.  Fingar,  supra.     But 
this  rule,  of  course,  does  not  apply  where  a  prior  party  has  been 
discharged  by   the  laches   of  the  intermediate   indorser;   for  the 
holder  need   give  notice  only  to  his  immediate  indorser.     West 
Kiver  Bank  v.  Taylor,  34  N.  Y.  128,  131.     And  after  the  respon- 
sibility of  an  indorser  has  been  fixed  no   act  or  dealing  of  the 
holder  with  the  maker  will  discharge  the  indorser,  except  it  be 
such  an  act  as  will  defeat,  impair  or  delay  the  right  of  the  in- 
dorser, on  paying  the  note,  to  recover  against  the  maker.     Farm- 
ers' Bank  V.  Sprigg,  11  Md.  390.    Where  the  holder  of  a  note,  with 
several  indorsers  in  blank,  sues  the  maker  and  writes  over  the 
name  of  the  first  indorser  an  order  to  pay  to  himself,  the  holder, 
but  without  striking  out  the  oiames  of  the  subsequent  indorsers, 
he  does  not  thereby  discharge  them,  and  therefore  one   of  them 
who  pays  the  amount  of  the  note  to  the  holder  may  sue  any  of 
the  prior  parties.     Cole  v.  Gushing,  8  Pick.  48.     An  indorser  is 
discharged  where  the  holder  has  allowed  the  statute  of  limitations 
to  run  against  the  maker.     Shutts  v.  Fingar,  100  N.  Y.  539. 
{h)   Spurgeon  v.  Smiths,  114  Ind.  453. 

(c)  By  an  express  reservation  of  the  holder's  rights  against  the 
drawer  or  indorsers,  their  rights  against  the  maker  or  acceptor 
are  reserved  by  implication.  Gloucester  Bank  v.  Worcester,  10 
Pick.  528;  Tombeckbe  Bank  v.  Stratton,  7  Wend.  429;  Stewart 
V.  Eden,  2  Gai.  121.  The  giving  of  a  judgment  or  other  security 
by  the  maker  or  a  prior  indorser  does  not  discharge  a  subsequent 
indorser.  First  Nat.  Bank  v.  Peltz,  176  Pa.  St.  513;  Guarantee 
Go.  V.  Graig,  155  Pa.  St.  343. 

id)  Statute  applied  in  Deahy  v.  Ghoquet  (R.  I.)  67  Atl.  Rep. 

421.     Any  extension,  no  matter  how  short,  by  a  valid  agreement, 

will  discharge  the  indorser  or  surety.     Gary  v.  White,  52  N.  Y. 

138;   Nightingale  v.  Meginnis,  34  N.  J.  Law,  461;   Siebeneck  v. 

Anchor   Savings  Bank,  111  Pa.   St.  187;  In  re  Bishop's  Estate, 

195  Pa.  St.  85;  Friedenberg  v.  Robinson,  14  Fla.  130.     But  there 

must  bo  an  enforcil)le  agreement  to  this  effect,  either  expressed  or 

iinpli<-<i.     (/'/.)     Ordinarily  the  taking  of   a  new  note  from  the 

debtr^r,   payable   at   a   future   day,  suspends   the    right   of  action 

upon   the  original   demand  until   the  maturity  of  the  new  note, 

aiul  lience  discharges  a  non-assentiiig  surety.    TTubbard  v.  Guriioy, 

G4  N.   Y.  450;   Place  v.  M<-llvain.  3.S  N.  Y.  960;   Fridonberg  v. 

liobinaon.   14  Fla.    130.     But  wlicn    the  new  security   is   payable 

on   demand  no  presumption   arises  of  an  agreement.      Board   of 


140  TllK    MX.OTIABLE   INSTRUAIENTS    i..\\\. 

Ediu-atiou  v.  l^iida,  77  N.  Y.  350,  362.  Aiul  where  new  security 
is  taken  merely  as  collateral,  the  fact  that  the  collateral  may  not 
bo  enforeible  until  a  detinite  time  in  the  future  docs  not  operate 
to  extcMid  the  time  of  payment  of  the  principal  debt  or  suspend  the 
right  to  sue  on  the  original  security.  Falkill  National  Jiank  v. 
Sleight,  1  App.  Div.  181),  191;  United  States  v.  Hodge,  0  How. 
(U.  S.)  279.  Mere  indulgence  to  the  maker  or  acceptor  will  not 
discharge  a  drawer  or  iiulorser;  there  must  be  an  agreement  to 
exti^nd  the  time  of  payment  binding  upon  the  holder.  Smith  v. 
Erwin,  77  N.  Y.  400;  liank  of  Utica  v.  Ives,  17  Wend.  501;  Craw- 
ford V.  JMillspaugh,  13  Johns.  87;  Lockwood  v.  Crawford,  18  Conn. 
370;  Friedenberg  v.  Eobinson,  14  11a.  130.  And  for  this  pur- 
pose the  contract  must  be  supported  by  a  valid  consideration. 
Gary  v.  White,  52  N.  Y.  138.  A  part  payment  by  the  maker  is 
not  such  a  consideration,  Halliday  v.  Hart,  30  N.  Y.  474;  nor  is 
an  agreement  to  pay  interest,  since  it  is  merely  a  promise  to  do 
what  the  party  is  already  bound  to  do.  Wilson  v-  Powers,  130 
Mass.  127 ;  Stuber  v.  Schack,  83  111.  192.  An  indorser  is  not  dis- 
charged by  extending  the  maker's  time  to  answer.  German-Am. 
Bank  V.  Niagara  Cycle  Co.,  13  App.  Div.  (N.  Y.)  450. 

The  ground  upon  which  an  agreement  to  give  time  to  the  maker, 
made  by  the  holder  without  the  consent  of  the  indorsers,  upon  a 
valid  consideration,  is  held  to  be  a  discharge  of  the  indorsers,  is 
solely  this,  that  the  holder  thereby  impliedly  stipulates  not  to 
pursue  the  indorsers,  or  to  seek  satisfaction  from  them  in  the  in- 
termediate period.  It  can  never  apply  to  any  case  where  a  con- 
trary- stipulation  exisrts  between  the  parties.  Hence,  if  the  agree- 
ment for  delay  expressly  saves  and  reserves  the  rights  of  the  holder 
in  the  intermediate  time  against  the  indorsers,  it  will  not  discharge 
the  latter.  In  such  case  the  very  ground  of  the  objection  is  re- 
moved, for  their  rights  are  oiot  postponed  against  the  maker  if 
they  should  take  up  the  note.  Hagey  v.  Hill,  75  Pa.  St.  108,  111. 
The  burden  of  showing  that  the  indorser  assented  to  such  exten- 
sion of  time  ig  on  the  party  seeking  to  charge  him.  Siebeneck  v. 
Anchor  Savings  Bank,  111  Pa.  St.  187. 

(e)  Wagman  v.  Hoag,  14  Barb.  233,  239;  Eockville  National 
Bank  V.  Holt,  58  Conn.  526;  Bank  v.  Simpson,  90  N.  G.  469; 
Minir  v.  Crawford,  L.  R.  2  Scotch  Appeals,  456;  Kenworthy  v. 
Sawyer,  125  Mass.  28;  Morse  v.  Huntington,  40  Vt.  488;  Hagey 
V.  Hill,  75  Pa.  St.  108.  In  the  previous  editions  of  this  work, 
the    author   expressed    the    opinion    that,    under    the    statute,    an 


DISCHARGE   OF   NEGOTIABLE   INSTRUMENTS.  I4I 

accommodation  maker  will  not  be  discharged  by  au  extension  of 
time  granted  to  the  indorser,  for  the  reason  that  a  maker,  even 
for  accommodation,  is,  by  virtue  of  section  three,  primarily  liable 
upon  the  instrument.  And  this  view  has  been  adopted  by  the 
Court  of  Appeals  of  Maryland  and  the  Supreme  Court  of  Oregon. 
Yanderford  v.  Farmers  &  Mechanics  Nat.  Bank,  06  Atl.  Eep. 
47 ;  10  L.  K.  Ann.  N.  S.  129 ;  Cellers  v.  Lyons,  89  Pac.  Rep.  426 ; 
10  L.  R.  Ann.  N.  S.  133.  In  the  Maryland  case,  it  was  said: 
"  Since  the  passage  of  the  negotiable  instruments  law,  this  is  the 
first  time  that  the  precise  question  raised  by  the  pleadings  in  this 
case  has  been  presented  to  this  court  for  decision ;  but  the  in- 
tention of  the  legislature,  as  expressed  in  the  section  of  the 
Code  we  have  quoted,  would  seem  to  be  obvious.  That  intention 
is  to  be  ascertained  by  the  words  used  to  express  it;  and  when 
its  meaning,  aa  gathered  from  the  words  employed,  is  plain  and 
intelligible,  the  court  should  give  it  effect.  When  the  legislature 
has  declared,  as  it  has  done  in  these  sections,  that  a  negotiable 
instrument  signed  by  a  party  who  is  primarily  liable  thereon,  as 
that  liability  is  defined  by  the  act,  may  be  discharged  in  one  of  the 
five  specified  methods,  it  would  seem  plain  that  it  meant  that  the 
particular  method  prescribed  for  the  accomplishment  of  that  result 
should  exclude  a  discharge  by  any  other,  or  different,  method, 
upon  the  familiar  maxim  that  the  express  mention  of  one  thing 
implies  the  exclusion  of  another."  And  in  the  Oregon  case,  the 
court  said:  "What  is  expressed  in  an  act  is  deemed  exclusive, 
when  it  is  creative,  or  in  derogation  of  some  existing  law,  or  of 
some  of  the  provisions  of  a  particular  act.  2  Sutherland,  Stat. 
Constr.  Lewis's  2d  Ed.  §  491.  It  is  Indicated  in  the  title  of  the 
act  under  consideration  that  its  purpose  is  "  to  establish  a  law 
uniform  with  the  laws  of  other  States  on  that  subject."  Inas- 
much as  the  enactments  relating  to  negotiable  instruments 
differed  in  the  various  States,  and  as  the  decision  interpreting 
both  the  common-law  and  legislative  provisions  were  far  from 
being  harmonious,  it  must  be  inferred,  from  the  language  con- 
stituting the  title  of  tlie  act,  that  it  was  inte.ided  to  provide  a 
complete  and  comprehensive  law  on  this  subject;  and,  since  it 
defines  an  accommodation  maker,  making  him  primarily  liable, 
and  in  one  section  designates  how  negotiable  instruments  may  be 
discbargci],  but  contains  no  provision  whereby  a  ])ersoTi  primarily 
lialilf  can  be  released,  except  by  payment,  etc.,  and  in  the  section 
following  specifies  the  manner  in  which  per.'ons  secondarily  liable 


14-  THE   .NKGOTIARLE   INSTRUMENTS   LAW. 

may  be  ivllovod  of  responsibility  on  such  instrument,  it  followa 
that  the  iinniunities  indicated  there  were  intended  to  exclude  all 
exceptions  not  contained  therein,  under  the  familiar  maxim: 
Expressio  unius  est  exclusio  alterius.  It  is  therefore  clear,  under 
the  well  settled  rule;^  governing  the  construction  of  statutes,  that 
when  this  act,  which,  in  eifect,  declares  tliat  all  persons  signing  a 
negotiable  instrument  shall  be  liable,  whether  executed  for  a 
valuable  consideration  or  as  an  accommodation  maker,  and  then 
specifies  the  particular  manner  in  which  negotiable  instruments 
may  be  discharged,  designating,  as  an  exception  thereto,  that, 
when  the  liability  is  secondary,  it  may  be  avoided  by  any  valid 
agreement  extending!  the  time  of  payment,  etc.,  without  such  per- 
son's consent,  was  passed,  it  was  the  intention  of  the  legislative 
assembly  to  make  such  provisions  exclusive  of  all  others."  A 
similar  view  was  taken  in  New  York  by  the  Appellate  Division, 
First  Department,  in  National  Citizens'  Bank  v.  Toplitz  (81  App. 
Div.  593)  which,  however,  was  affirmed  in  the  Court  of  Appeals 
on  other  grounds.  (178  N.  Y.  4GG.)  See  also  Delaware  County 
Trust  Co.  V.  Title  Ins.  Co.  199  Pa.  St.  17. 

§  202.  Right  of  party  who  discharges  instrument. — 
Where  the  instrument  is  paid  by  a  party  secondarily  liable 
thereon,  it  is  not  discharged ;  but  the  party  so  paying  it  is 
remitted  to  his  former  rights  as  regards  all  prior  parties, 
(a)  and  he  may  strike  out  his  own  and  all  subsequent  in- 
dorsements, and  again  negotiate  the  instrument  (&),  except: 

1.  AMiere  it  is  payable  to  the  order  of  a  third  person, 
and  has  been  paid  by  the  drawer ;  and 

2.  Where  it  was  made  or  accepted  for  accommodation, 
and  has  been  paid  by  the  party  accommodated  (c). 

(a)  The  application  of  this  section  is  necessarily  limited  to 
cases  where  the  person  secondarily  liable  can  trace  his  title 
through  the  prior  parties  to  the  party  whom  he  seeks  to  hold.  If, 
when  remitted  to  his  former  rights,  he  would  have  no  cause  of 
action  against  any  party  to  the  paper,  payment  by  him  discharges 
the  instrument.     Quimby  v.  Varnum,  190  Mass.  211. 

(h)  Where  an  indorser  takes  up  the  instrument,  after  it  has  been 
dishonored,  by  paying  the  amount  of  it  to  the  holder,  the  transac- 


DISCHARGE   OF    NEGOTIABLE   INSTRUMENTS.  I43 

tion  is  in  effect  a  repurchase  of  the  paper,  aud  not  a  payment  of 
it,  and  the  indorser  becomes  vested  again  with  all  the  rights 
which  he  formerly  had  against  prior  parties.  French  v.  Jarvis, 
29  Conn.  347.  And  the  paper  retains  its  negotiable  character. 
Gould  V.  Eager,  17  Mass.  615;  Davis  v.  Miller,  14  Gratt.  1.  And 
although  in  the  case  of  accommodation  paper  the  indorsee  may 
not  pay  actual  value  at  the  time  of  his  indorsement,  yet  if  he 
pays  the  instrimaent  and  gets  possession  of  it  he  is  deemed  a 
holder.  Eeinhart  v.  Schall,  69  Md.  352.  It  is  necessary  to  strike 
out  all  subsequent  indorsements ;  for  after  the  paper  has  once  been 
paid  it  camiot  be  negotiated  again  if  such  negotiation  would 
make  any  of  the  parties  liable  who  would  otheinvise  be  discharged. 
Goodner  v.  Maynard,  7  Allen,  456;  Citizens'  Bank  v.  Say,  80  Va. 
436.  And  by  putting  the  note  in  circulation  again  the  liability 
of  subsequent  parties  is  not  revived.  Davis  v.  Miller,  14  Gratt.  1. 
A  note  coming  into  the  hands  of  the  maker  under  such  circum- 
stances as  to  raise  a  presumption  of  its  payment  cannot  be 
pledged  by  him  as  collateral  so  as  to  bind  a  surety,  although  the 
note  may  not  have  matured  at  the  time  of  it:^  reissue.  First 
National  Bank  v.  Harris,  7  Wash.  139.  Where  payment  is  made 
by  the  second  indorser,  the  case  is  within  the  provisions  of  this 
section.  Twelfth  Ward  Bank  v.  Brooks,  63  App.  Div.  (N.  Y.) 
220.  Possession  of  the  paper  by  an  indorser,  after  its  protest 
for  non-payment,  is  prima  facie  evidence  that  he  has  performed 
his  contract  of  endorsement,  and  has  paid  to  tbc  holder  the 
amount  due.  Hill  v.  Buchanan,  71  N.  J.  L.  301.  See  section  200. 
(c)  Cottrell  V.  Watkins,  89  Va.  801.  Where  the  instrument  is 
paid  by  an  accommodation  acceptor  it  is  discharged,  and  becomes 
commercially  dead,  but  is  evidence  in  the  hands  of  the  payer  to 
charge  the  real  debtor.  First  Nat.  Bank  v.  Maxfield,  83  Me.  576.  . 
So,  where  one  of  several  accommodation  makers  pays  the  note, 
it  remains  in  his  hands  evidence  of  his  right  to  contribution 
from  his  co-sureties.  This  right  may  be  assigned  by  him,  and 
the  delivery  of  the  note  by  hiin  to  a  third  person  for  a  valuable 
consideration  raises  a  presumption  of  an  intention  to  pass  this 
right  to  the  transferee.  Dillenbeck  v.  Bygert,  97  N.  Y.  303. 
When-  an  accommodation  indorser  tor  tlic  payee  has  pai<l  the 
iiot<;  lie  may  recover  the  amount  of  an  accommodation  maker. 
l^aubach  v.  Purscll,  35  N.  J.  Law,  434.  And  where  a  second 
indorst-T  of  a  note  has  paid  and  taken  it  up  lu"  becomes  a  holder 
for  value,  and  may   maintain   an   action  to   recover  the  amount 


144  1"il^    NEGOTIABLE    INSTRUMEiN  IS    LAW. 

thereof  of  the  first  indorser,  although  both  are  accommodation  in- 
dorsors.  Koll.v  r.  lUirrou.y:hs,  102  N.  Y.  93.  See  also  Kaschiicr  v. 
Coukliii,  40  Conn.  81.     See  section  118. 

§  203,  Renunciation  by  holder.—  The  holder  may  ex- 
l)rcssly  renounce  his  rights  against  any  party  to  the  instru- 
ment, before,  at  or  after  its  maturity.  An  absolute  and 
unconditional  renunciation  of  his  rights  against  the  prin- 
pal  debtor  made  at  or  after  the  maturity  of  the  instrument, 
discharges  the  instrument  (a).  But  a  renunciation  does  not 
affect  the  rights  of  a  holder  in  due  course  without  notice. 
A  renunciation  must  be  in  writing,  unless  the  instrument  is 
delivere^l  tip  to  the  person  primarily  liable  thereon  (b). 

(a)  In  Leask  v.  Dew,  102  App.  Div.  (N.  Y.)  529,  534,  it  was 
said  hy  Hatch,  J.:  "There  is  some  obscurity  in  the  provisions 
of  our  statute.  In  its  first  sentence  it  provides  for  the  renuncia- 
tion of  the  rights  of  the  holder  against  any  party  to  the  instru- 
ment which  may  be  made  before,  at  or  after  its  maturity.  In 
the  second  sentence  it  provides  for  an  absolute  and  unconditional 
renunciation  of  the  rights  of  the  holder  against  the  principal 
debtor  at  or  after  the  maturity  of  the  instrument,  which  dis- 
charges the  instrument.  The  first  relates  to  the  party;  the  second 
to  the  instrument.  It  is  somewhat  difficult  to  see  how  there 
could  be  an  absolute  discharge  of  a  party  to  an  instrument  with- 
out discharging  the  instrument  as  an  obligation  so  far  as  he  is 
concerned.  We  do  not  clearly  perceive  why  this  distinction  should 
have  been  made."  But  upon  reflection,  it  will  be  seen  that  the 
distinction  is  indispensable.  If  the  party  in  whose  favor  the 
renunciation  is  made  is  only  secondarily  liable,  then  only  he 
and  parties  subsequent  to  him  are  discharged,  and  the  instrument 
still  remains  in  force  as  to  prior  parties.  See  section  201,  sub- 
division 3.  But  when  the  holder  renounces  his  rights  against  the 
person  primarily  liable,  then  the  instrument  itself  is  discharged. 
The  learned  judge  writing  as  above-mentioned  evidently  had  in 
mind  the  facts  of  the  case  before  the  court,  where  the  maker  was 
the  only  party  to  the  paper,  and  he  thus  failed  to  note  the 
situation  which  will  arise  where  there  are  a  number  of  indorsers. 
Thus,  if  a  bill  drawn  by  A  and  accepted  by  B,  should  be  indorsed 


DISCHARGE    OF    NEGOTIABLE   INSTRUMENTS.  I45 

by  C  and  D,  a  renunciation  in  favor  of  D  would  discharge  him 
only,  and  a  renunciation  in  favor  of  C  would  discharge  only  C 
and  D ;  but  a  renunciation  in  favor  of  B,  the  acceptor,  would  dis- 
charge the  instrument. 

(b)  Baldwin  v.  Daly,  41  Wash.  416.  After  a  testator's  death, 
there  was  found  among  his  papers,  inclosed  in  an  envelope,  a 
promissory  note  payable  to  him  and  an  instrument  signed  by  him 
and  addressed  to  his  executors  stating,  "  Gentlemen. —  The  en- 
closed note  I  wish  to  be  cancelled  in  case  of  my  death,  and  if  the 
law  does  not  allow  it,  I  wish  you  to  notify  my  heirs  that  it  is 
my  wish  and  orders:" — Held,  that  this  was  not  a  renunciation 
within  the  statute.    Leask  v.  Dew,  102  App.  Div.  (N.  Y.)  529. 

§  204.  Cancellation ;  unintentional ;  burden  of  proof. — 
A  cancellation  made  unintentionally,  or  under  a  mistake,  or 
without  the  authority  of  the  holder,  is  inoperative;  but 
where  an  instrument  or  any  signature  thereon  appears  to 
have  been  canceled  the  burden  of  proof  lies  on  the  party 
who  alleges  that  the  cancellation  was  made  unintentionally, 
or  under  a  mistake  or  without  authority  (a). 

(a)  Upon  the  trial,  the  signature  of  the  indorser  appeared  to 
have  been  cancelled,  and  the  plaintiff  claimed  that  it  was  can- 
celled without  authority: — Held,  that,  under  the  statute,  the 
burden  of  showing  this  was  on  the  plaintiff.  McCormick  v.  Shea, 
50  Misc.  (N.  Y.)  592. 

§205.  Alteration  of  instrument;  effect  of. —  Where  a 
negotiable  instrument  is  materially  altered  without  the  as- 
sent of  all  parties  liable  thereon,  it  is  avoided,  except  as 
against  a  party  who  has  himself  made,  authorized  or  as- 
sented to  the  alteration  and  subsequent  indorsers  (a).  But 
when  an  instrument  has  been  materially  altered  and  is  in 
the  hands  of  a  holder  in  due  course,  not  a  party  to  the 
alteration,  he  may  enforce  payment  thereof  according  to  its 
original  tenor  (b). 

(a)  See  Jeffrey  v.  Rosenfeld,  179  Mass.  506,  where  the  effect 
of  this  provision  was  discussr-d,  but  not  decided.     The  burden  of 
•  10 


l^G  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

explaining  an  apparent  alteration  is  upon  the  party  pn)clucing 
the  paper,  dowiley  v.  liobbins,  3  App.  Div.  353;  Ot'enstein  r. 
Bryan,  20  App.  Cas.  I).  C.  1;  Town  of  Solon  v.  Willianishurj-h 
Savings  Bank,  lU  :N'.  Y.  122,  135;  Simpson  v.  Daviij,  111)  Mass. 
209;  Gettysburg  National  Bank  v.  Chisolni,  1(59  Pa.  St.  564; 
Citizen's  Nat.  Bank  v,  Williams,  174  Pa.  St.  CO;  Paine  v.  Kdsell, 
19  Pa.  St.  178.  If  the  paper  appears  to  have  been  altered  he 
must  explain  thia  appearance;  but  if,  on  the  other  hand,  how- 
ever material  in  fact  the  alteration  may  be,  there  is  upon  the 
face  of  the  paper  no  evidence  or  mark  raising  a  suspicion  thereof, 
the  holder  is  not  called  upon  to  make  an  explanation  or  to 
introtluce  any  testimony  until  the  alteration  has  been  shown  by 
sutHcient  evidence  outside  of  the  paper.  Harris  v.  The  Bank  of 
Jacksonville,  20  Fla.  501,  512. 

(6)  Statute  applied  in  Thorpe  v.  White,  188  Mass.  333;  Mos- 
kowitz  V.  Deutsch,  46  Misc.  (N.  Y.)  602.  See  also  Willis  v. 
Wilson,  3  Oregon,  308.  A  note  made  and  dated  in  Ohio  and 
indorsed  in  New  York  was  afterwards  altered  by  the  payee  by 
adding  the  words  "with  interest  at  eight  per  cent,  per  annum 
after  due  until  paid"  and  after  such  alteration  was  discounted 
by  a  bank  in  Cleveland  : —  Held  that  the  indorsement  being  a  New 
York  contract,  the  indorser  was  liable  under  this  section.  Colonial 
Nat.  Bank  v.  Duerr,  108  App.  Div.  (N.  Y.)  215.  In  Smith  v. 
State  Bank,  104  N.  Y.  Supp.  750,  an  accommodation  indorser  was 
held  liable  to  a  bank  paying  the  same  for  the  difference  between 
the  check  as  originally  drawn  and  the  amount  to  which  it  was 
raised.  But  the  statute  does  not  apply  where  the  paper  never 
had  a  legal  inception,  or  where  the  name  of  the  payee  was  changed 
before  delivery.  First  Nat.  Bank  v.  Gridley,  112  App.  Div.  (N.  Y.) 
398.  The  fact  that  the  indorser's  name  was  struck  out  by  his 
representative  in  the  plaintiff's  presence,  may  be  considered  in 
determining  whether  the  cancellation  was  unauthorized  or  con- 
sented to.     McCormick  v.  Shea,  50  Misc.  592. 

This  section  changes  the  law  in  some  States.  Prior  to  the 
statute  the  rule  in  many  jurisdictions  was  that  where  the  altera- 
tion was  made  without  the  consent  of  the  party  sought  to  be 
charged,  there  could  be  no  recovery  even  by  an  innocent  holder 
for  value,  and  even  though  he  sought  to  recover  on  the  instru- 
ment as  it  wag  before  the  alteration.  Gettysburg  National 
Bank  v.  Chisolm,  169  Pa.  St.  564;  Hartley  v.  Carboy,  150  Pa.  St. 
23;    Wood    v.    Steele,    6   Wall.    80;    Citizens'    National    Bank    v. 


DISCHARGE   OF    NEGOTIABLE   INSTRUMENTS.  I47 

Richmond,  121  Mass.  110.  In  the  case  first  cited  it  was  said: 
"  In  the  present  case  the  alteration  was  not  probably  made 
by  an  agent  of  the  payee,  and  it  was  entirely  without  the  knowl- 
enge  and  consent  of  the  defendant,  who  was  the  maker  of  the 
note.  Of  course  the  payee  could  not  recover  on  the  note  for  any 
amount,  because  it  was  an  altered  instrument,  and  is  avoided 
altogether  by  public  policy.  Certainly  he  could  not  restore  life 
to  it  by  passing  it  over  to  an  indorsee."  But  compare  Gleason 
V.  Hamilton,  138  N.  Y.  353;  Town  of  Solon  v.  Williamsburgh 
Savings  Bank,  114  N.  Y.  122,  13-1.  In  cases  of  mere  spoliation, 
where  the  original  tenor  was  apparent  upon  inspection,  it  has  been 
held  sufficient  to  declare  on  the  instrument  in  such  form,  and  upon 
the  spoliation  being  shown,  there  is  no  variance  between  the  alle- 
gation and  the  proof.  Drum  v.  Drum,  133  Mass.  566.  A  similar 
rule  would  now  seem  to  applj^  where  there  was  proof  that  the 
plaintiff  was  not  a  party  to  the  alteration.  Whether  the  holder 
of  a  note  originally  stated  to  be  payable  "  with  interest,"  no  rate 
being  named,  and  altered  by  the  insertion  of  the  words  "  seven  per 
cent,"  must  declare  on  the  note  as  it  was  before  the  alteration 
in  order  to  recover  interest  upon  it  at  six  per  cent.,  quaere. 
Massachusetts  National  Bank  v.  Snow,  187  Mass.  160. 

^  206.  What  constitutes  a  material  alteration. —  Any 
alteration  which  changes : 

1.  The  date  (a)  ; 

2.  The  sum  payable,  either  for  principal  (b)  or  interest 

(0; 

3.  The  time  (d)  or  place  (r)   of  payment; 

4.  The  number  or  the  relations  of  the  parties  (/)  ; 

5.  The  medium  or  currency  in  which  payment  is  to  be 
made  (g) : 

Or  wliich  adds  a  place  of  payment  where  no  place  of 
payment  is  specified  (h),  or  any  otlicr  change  or  addition 
which  alters  the  effect  of  the  instrument  in  any  respect,  is  a 
material  alteration  (/). 

(a)   National   n^tor  County  Bank  v.  Ma.ldon.  lU  N.  Y.  280; 
Crawford   v.   West   Side  Bank.    100  N.   Y.  50,  56;  Moskowitz  v. 


I4i^  THK    NEGOTIABLE    INSTRUMENTS    LAW, 

Doutsch,  4G  Misc.  (N.  Y.)  003;  Wood  v.  Stoelo,  G  Wall.  80;  New- 
iiijui   V.  Kiiii;-,  .'■»4  Ohio  St.  liTo. 

C6)  Katchokler  c.  While,  80  Va.  103.  This  is  so,  though  the 
amount  is  lossened,  as  where  $500  was  ohaiigeJ  to  $400.  llewius 
V.  Carji:ill,  G7  Ale.  554. 

(c)  Gettysbui-jr  National  Bank  v.  Chisolm,  169  Pa  St.  504.  Tii 
this  ease  the  words  "  with  interest  at  six  per  ce.nt."  were  inter- 
lined. In  Colonial  Nat.  Bank  v.  Ducr,  108  App.  Div.  (N.  Y.) 
215,  the  words  "  with  interest  at  eight  per  cent,  per  annum  after 
due  until  paid  "  were  added. 

(d)  Rogers  v.  Vosburgh,  87  N.  Y.  208;  Weyman  v.  Yeomans, 
84  111.  403;  Miller  v.  Gilleland,  19  Pa.  St.  119. 

(e)  Tidniarsh  v.  Grover,  1  Alaule  &  S.,  735;  Bank  of  Ohio 
Valley  v.  Loekwood,  13  W.  Va.  302. 

(f)  Hoffman  v.  Planters'  Nat.  Bank,  Va.  (a  case  arising  under 
the  statute).  In  McCaughey  v.  Smith,  27  N.  Y.  39,  and  Brownell 
V.  Winnie,  29  N.  Y.  400,  it  was  held  that  the  addition  of  another 
name  as  maker,  where  there  was  but  one,  was  not  a  material 
alteration,  the  additional  maker  being  regarded  as  a  guarantor. 
The  statute  has  probably  changed  this  rule. 

(g)  Angle  v.  Insurance  Company,  92  U.  S.  330;  Church  v.  How- 
ard. 17  Ilun,  5;  Darwin  v.  Rippey,  63  N.  C.  318;  Bogarth  v. 
Breedlove,  39  Tex.  561.  Thus,  adding  to  a  note  the  words  "  in 
gold  coin "  is  a  material  alteration.  Wills  v.  Wilson,  3  Oregon 
308. 

(/(,)  Whitesides  v.  Northern  Bank,  10  Bush,  501. 

(i)  Weyerhauser  v.  Dun,  100  N.  Y.  1.50.  Addition  of  special 
agreement.  In  some  States  it  has  been  held  that  the  addition  of 
the  name  of  an  attesting  witness  is  a  material  alteration.  Smith 
V.  Dunham,  8  Pick.  246;  Homer  v.  Wallis,  11  Mass.  310;  Thorn- 
ton V.  Appleton,  29  Me.  298;  Brackett  v.  Mountfort,  11  Me.  115. 
But  in  those  States  the  attestation  extends  the  liability  of  the 
maker  under  the  statute  of  limitations,  and  so  changes  to  some 
extent  the  nature  of  the  contract  and  enlarges  its  obligations.  In 
other  States  where  such  addition  would  not  have  this  effect  the 
alteration  w^ould  not  be  material.     Fuller  v.  Green,  64  Wis.  159. 


BILLS  OF  exchange;     PORM   AND  INTERPRETATION.    I49 


ARTICLE  X. 
Bills  of  Exchange;  Form  and  Interpretation. 

Section  210.  Bill  of  exchange  defined. 

211.  Bill  not  an  assignment  of  funds  in  hands  of 

drawee. 

212.  Bill  addressed  to  more  than  one  drawee. 

213.  Inland  and  foreign  bills  of  exchange. 

214.  When  bill  may  be  treated  as  promissory  note. 

215.  Drawee  in  case  of  need. 

§  210.  Bill  of  exchange  defined. — A  bill  of  exchange  is  an 
unconditional  order  in  writing  addressed  by  one  person  to 
another,  signed  by  the  person  giving  it,  requiring  the  person 
to  whom  it  is  addressed  to  pay  on  demand  or  at  a  fixed  or 
determinable  future  time  a  sum  certain  in  money  to  order 
or  to  bearer  (a). 

(a)  Jarvis  v.  Wilson,  46  Conn.  91. 

§  211.  Bill  not  an  assignment  of  funds  in  hands  of  drawee. 
— A  bill  of  itself  does  not  operate  as  an  assignment  of  the 
funds  in  the  hands  of  the  drawee  available  for  the  pay- 
ment thereof,  and  the  drawee  is  not  liable  on  the  bill  unless 
and  until  he  accepts  the  same  (a). 

(a)  Harris  v.  Clark,  3  N.  Y.  93 ;  Mandeville  v.  Welch,  5  Wheat. 
286;  Brill  v.  Tutde,  81  N.  Y.  454;  Alj-or  r.  Scott,  54  N.  Y.  14; 
Munper  v.  Shaimoii.  01  N.  Y.  251  ;  Coninionwoalth  v.  Am.  Life 
Ills.  Co.  167  Pa.  St.  .'iSO;  l^illy  v.  Daly,  150  Pa.  St.  005;  Bailoy  v. 
Southwestern  R.  R.  Bank,  11  Kla.  200.  But  when,  for  a  valuable 
consideration  from  the  payee,  the  order  is  drawn  iiimn  a  tliird 
party  and  made  payable  out  of  a  particular  t\iii<l.  tbcii  ilue  or  to 
become  due,  from  him  to  tli<'  drawer,  the  delivery  nf  llie  order  to 


150  THE    XEGOriAKLli   lASTKLMEN'TS    LAW. 

till'  payoc  operates  as  au  assignment  pro  ianlo  of  the  fund,  and 
the  drawee  is  bound,  after  notiee  of  such  assignment,  to  apply  the 
fund,  as  it  aeerues.  to  the  payment  of  the  order  and  to  no  other 
purpose,  and  tlie  payee  may,  by  aetion.  eompel  such  application. 
Brill  V.  Tuttle,  81  N.  Y.  IS-l,  457.  An  intention  to  make  an 
assigrnment  of  the  funds  in  the  hands  of  the  drawee  may  be  in- 
ferred from  the  circumstances  attending  the  delivery  of  the  draft 
and  the  conduct  of  the  parties.  Throop  Grain  Cleaner  Co.  v. 
Smith,  110  K.  Y.  83. 

§212.  Bill  addressed  to  more  than  one  drawee. —  A  bill 
may  be  addressed  to  two  or  more  drawees  jointly,  whether 
they  are  partners  or  not :  but  not  to  two  or  more  drawees 
in  the  alternative  or  in  succession. 

§  213.  Inland  and  foreign  bills  of  exchange. —  An  inland 
bill  of  exchange  is  a  bill  which  is,  or  on  its  face  purports 
to  be,  both  drawn  and  payable  within  this  State.  Any  other 
bill  is  a  foreign  bill  (a).  Unless  the  contrary  appears  on  the 
face  of  the  bill,  the  holder  may  treat  it  as  an  inland  bill. 

(a)  Statute  applied,  Amsinck  v.  Eogers,  189  N.  Y.  252.  See 
also  Commercial  Bank  of  Kentucky  v.  Varnum,  49  N.  Y.  269; 
Life  Insurance  Company  v.  Pendleton,  112  U.  S.  690;  Armstrong 
V.  American  Ex.  National  Bank,  133  U.  S.  433;  Buckner  v.  Fin- 
ley,  2  Peters,  586;  Joseph  v.  Solomon,  19  Fla.  623;  Phoenix  Bank 
V.  Hussey,  12  Pick.  483;  Thompson  v.  Commercial  Bank,  3  Caldw. 
49;  Union  Bank  v.  Fowlkes,  2  Sneed,  556. 

§  214.  When  bill  may  be  treated  as  promissory  note. — 
Where  in  a  bill  the  drawer  and  drawee  are  the  same  per- 
son, or  where  the  drawee  is  a  fictitious  person,  or  a  person 
not  having  capacity  to  contract,  the  holder  may  treat  the 
instrument,  at  his  option,  either  as  a  bill  of  exchange  or  a 
promissory  note  (a). 

(a)  See  section  36. 


BILLS     OF     EXCHAXGE;     FORM     AND    INTERPRETATION.      151 

§  215.  Referee  in  case  of  need — The  drawer  of  a  bill  and 
any  indorser  may  insert  tliereon*  the  name  of  a  person  to 
whom  the  holder  may  resort  in  case  of  need,  that  is  to  say, 
in  case  the  bill  is  dishonored  by  non-acceptance  or  non-pay- 
ment (a).  Such  person  is  called  the  referee  in  case  of 
need.  It  is  in  the  option  of  the  holder  to  resort  to  the  ref- 
eree in  case  of  need  or  not  as  he  may  see  fit. 

(a)  The  usual  form  is:  "In  case  of  need,  apply  to  Messrs.  C 
and  D,  at  E."     Chitty  on  Bills,  165. 


*  Error  in  engrossing.     The  word  should  be  "  therein." 


152  THE   NEGOTIABLE   INSTRUMENTS   LAW. 


ARTICLE  XI. 
Acceptance  of  Bills  of  Exchange. 

Section  220.  Acceptance,  how  made,  et  cetera. 

221.  Holder  entitled  to  acceptance  on  face  of  bill, 

222.  Acceptance  by  separate  instrument. 

223.  Promise  to  accept ;  when  equivalent  to  accept- 

ance. 

224.  Time  allowed  drawee  to  accept. 

225.  Liability  of  drawee  retaining-  or   destroying 

bill. 

226.  Acceptance  of  incomplete  bill, 

227.  Kinds  of  acceptances. 

228.  What  constitutes  a  general  acceptance, 

229.  Qualified  acceptance. 

230.  Rights  of  parties  as  to  qualified  acceptance, 

§  220.  Acceptance ;  how  made,  et  cetera, —  The  acceptance 
of  a  bill  is  the  signification  by  the  drawee  of  his  assent  to 
the  order  of  the  drawer  (a).  The  acceptance  must  be  in 
writing  and  signed  by  the  drawee  (&).  It  must  not  ex- 
press that  the  drawee  will  perform  his  promise  by  any  other 
means  than  the  payment  of  money. 

(a)  The  acceptance  is  a  response  to  the  direction  contained  in 
the  bill,  and  the  language  of  the  bill  and  the  acceptance  are  but 
parts  of  one  entire  contract  in  writing.  Meyer  v.  Beardsley,  29 
N.  J.  Law,  236.  But  this  contract  is  regarded  as  a  new  contract. 
Superior  City  v.  Ripley,  138  U.  S.  93.  The  usual  mode  of  making 
an  acceptance  is  by  writing  the  word  "  accepted,"  and  subscrib- 
ing the  drawee's  name.  Byles  on  Bills,  190.  But  the  drawee's 
signature  alone  is  sufficient.  Spear  v.  Pratt,  2  Hill,  582 ;  Wheeler 
V.  Webster,  1  E.  D.  Smith. 


ACCEPTANCE    OF    BILLS    OF    EXCHANGE.  I53 

(6)  1  Rev.  Stat.  N.  Y.  768,  section  6;  Laws  of  Pa.  1881,  17. 
The  English  Bills   of  Exchange  Act,  following  previous  English 
statutes  (1  and  2  George  IV.,  C.  78;  19  and  20  Victoria,  C.  78) 
requires  that  the  acceptance  be  written  on  the  bill.     The  Amer- 
ican statutes  do  not  generally  require  this;  and  such  a  require- 
ment would  sometimes  work  inconvenience.     Thus,    it  has  been 
held  that  a  bank  can  accept  a.  check  by  telegraph,  and  such  an  ac- 
ceptance has  been    deemed  to  be  within  the  terms  of  a  statute 
requiring  acceptances  to  be  in  writing,  North  Atchison  Bank  v 
Garretson,  51  Fed  Rep.  1G7;  but  to  require  the  acceptance  to  be  on 
the  instrument  itself  would  preclude  the  giving  of  an  acceptance 
by  telegraph  either  by  a  bank  or  by  any  other  drawee.    But  under 
the  statute  the  acceptance  of  a  bank  as  well  as  that  of  any  other 
payee  must  be  in  writing.     Van  Buskirk  v.  State  Bank  of  Rocky 
Ford,  35  Colo.  112.     At  conimon  law  an  oral  acceptance  was  suffi- 
cient.    Scudder  v.  Union   Bank,  91  U.  S    406;  Hall   i'.  Cordell, 
142  U.  S    116;  Jones  v    Council  Bluffs  Branch,  Etc.  34  111.  313; 
Sturges  V.  Chicago  Fourth  Nat.  Bank,  75  111.  595;  Ward  v.  Allen, 
2  Mete    53,  Cook  v.  Baldwin,  120  Mass.  317.     The  introduction 
of  this  doctrine,  however,  was  often  regretted.     In  Clark  v.  Coch, 
4  East.  72,  Lawrence,  J.,  said :     "  It  would  have  been  much  better 
doctri'ue  il   it  had  been    originally  determined  that  nothing  else 
should  amount  to  an  acceptance  than  a  written  acceptance  on  the 
bill    itselt."      As    the    statute    requires   the    acceptance   to    be   in 
writing,  the  fact  that  it  was  so  given  must  be  pleaded.  "Wadhams 
V.  Portland,  Etc.,  Ry.  Co..  37  Wash   86 

§  221.  Holdei  entitled  to  acceptance  on  face  of  bill. —  The 
holder  of  a  bill  presenting  the  same  for  acceptance  may 
reqm're  that  the  acceptance  be  written  on  the  bill,  and  if 
such  request  is  refused,  may  treat  the  bill  as  dishonored. 

1  Rev.  Stat.  N.  Y.,  section  9. 

§  222.  Acceptance  by  separate  instrument. —  Where  an 
acceptance  is  written  on  a  paper  other  than  the  bill  itself, 
it  does  not  bind  the  acceptor,  except  in  favor  of  a  person  to 
whom  it  is  shown  and  who,  on  the  faith  thereof,  receives 
tlic  l)ill  for  value. 

1  Rev.  Stat.  N.  Y.   708,  section  7. 


154  '^'^^^    NEGOTIABLE   INSTRUMENTS    LAW. 

§  223.  Promise  to  accept;  when  equivalent  to  acceptance. 
— An  unconditional  promise  in  wrilint;-  (</)  lo  accept  a  bill 
before  it  is  drawn  is  deemed  an  actual  accei>tance  in  favor 
of  every  person  who,  upon  tiie  faith  thereof,  receives  the 
hill  lor  value  (b). 

(a)  Statute  applied,  Bank  of  Morganton  v.  Hay,  143  N.  C. 
326.  An  absolute  authority  to  draw  is  equivalent  to  an  uncon- 
ditional promise  to  pay  the  draft  within  the  statute.  Euiz  v. 
Renauld.  100  N.  Y.  256;  Merchants'  Bank  v  Griswold,  72  N.  Y. 
472,  479;  Barney  r.  Wortington,  37  N.  Y.  112.  The  promise  must 
be  unconditional.  Germania  National  Bank  v.  Tooko,  101  N  Y. 
442;  Shover  v.  Western  Union  Telegraph  Co.,  57  N.  Y.  459,  463. 
But  restrictions  as  to  the  time  or  amount  do  .not  prevent  the 
promise  from  being  treated  as  unconditional  and  absolute  as  to 
drafts  within  the  limitation.  Bank  of  Michigan  v  Ely^  17  Wend. 
508;  Ulster  Co.  Bank  v.  McFarlan,  5  Hill,  432.  It  is  also  held 
that  an  authority  given  to  an  agent  to  draw  "  from  time  to  time, 
as  may  be  necessary  in  the  purchase  of  lumber,"  or  as  "  you  want 
more  funds,"  operates  simply  as  an  instruction  to  the  agent,  and 
does  not,  as  to  persons  dealing  with  him  in  good  faith,  constitute 
a  condition.  Merchants'  Bank  v.  Griswold,  72  N.  Y.  472;  Bank 
of  Michigan  v  Ely,  17  Wend.  508.  The  party  dealing  with  the 
agent  may  rest  upon  his  representation,  express  or  implied,  that 
the  draft  is  in  the  business  of  the  principal,  or  that  the  funds  are 
needed,  and  he  is  protected,  although  it  turns  out  that  the  repre 
sentation  is  false  N.  Y  &  N.  II.  R.  11.  Co,  v.  Schuyler,  34  N.  Y. 
30;  Merchants'  Bank  v.  Griswold,  72  N.  Y.  472.  The  require- 
ment that  the  promise  shall  be  in  writing  is  wholly  statutory. 
At  common  law  an  oral  promise  was  sufficient.  Dull  v.  Bricker, 
76  Pa.  St.  255 ;  Scudder  v.  Union  Nat.  Bank,  91  U.  S  406 ;  Wil- 
liams V.  Winans,  2  Gr.  (N.  J.)  239 ;  Jarvis  v.  Wilson,  46  Conn.  91 
A  telegraphic  authority  is  sufficient.  Johnsoai  v.  Clark,  39  N.  Y. 
216;  North  Atchison  Bank  v.  Garretson,  51  Fed.  Rep.  167;  Frank- 
lin Bank  v.  Lynch,  52  Md.  270.  As  to  countermanding  by  tele- 
graph an  offer  to  accept,  see  First  Nat.  Bank  v.  Ciark,  61  Md. 
400.  A  promise  to  accept  is  governed  by  the  law  of  the  State 
where  it  is  made,  notwithstanding  it  is  to  be  performed  elsewhere. 
Scott  V.  Pilkuigton,  15  Abb.  Pr.  280. 

(fe)  1  Rev.  Stat.  N.  Y.  768,  section  8;  Brown  v.  Ambler,  66  Md. 


ACCEPTANXE    OF    BILLS    OF    EXCHANGE.  1 55 

391.     But  the  holder  must   acquire  the  hill  on  the  faith  of  the 
promise  to  accept.    Howland  v.  Carson,  15  Pa.  St.  453. 

§  224.  Time  allowed  drawee  to  accept. —  The  drawee  is 
alloAved  twenty-four  hours  after  presentment  in  which  to 
decide  whether  or  not  he  will  accept  the  bill  (a)  ;  but  the 
acceptance  if  given  dates  as  of  the  day  of  presentation  (b). 

(a)  See  Byles  on  Bills,  182;  Daniel  on  Neg.  Inst.,  section  492. 
By  the  former  statute  of  Massachusetts,  the  drawee  had  until  two 
o'clock  on  the  day  following.  (Public  Statutes,  1882,  Ch.  77,  sec- 
tiooi  17.) 

(b)  There  does  not  appear  to  be  any  direct  authority  on  this 
point;  the  rule  of  the  statute  conforms  to  what  was  the  common 
practice.     See  also  statute  of  Massachusetts  above  referred  to. 

§  225.  Liability  of  drawee  retaining  or  destioying  bill.— 
Where  a  drawee  to  whom  a  bill  is  delivered  for  accept- 
ance destroys  the  same,  or  refuses  within  twenty-four  hours 
after  such  delivery,  or  within  such  other  period  as  the  holder 
may  allow,  to  return  the  bill  accepted  or  non-accepted  to 
the  holder,  he  will  be  deemed  to  have  accepted  the  same  (a). 

(a)  This  section  was  taken  without  change  from  a  New  York 
statute  which  had  been  in  force  for  many  years.  1  Eov.  Stat.  N.  Y. 
709,  sec.  11  This  statute  had  been  construed  by  the  Court  of 
Appeals,  which  held  that  the  refusal  spoken  of  meant  an  afhrma- 
tive  act,  and  that  a  mere  omission  to  return,  where  there  was 
no  demand,  was  not  a  "  refusal "  within  the  meaning  of  the 
statute.  Matteson  v.  Moulton,  79  Y .  Y  627.  See  also  West- 
berg  V.  Chicago  Lumber  &  Coal  Co.,  117  Wis.  589.  And  this 
seems  to  be  the  plain  import  of  the  language  used.  But  the 
Supreme  Court  of  Pennsylvania,  in  a  late  case,  has  held  that  mere 
neglect  to  return  the  paper  may  constitute  such  a  refusal.  Wis- 
nei  V.  First  Nat.  Bank,  68  Atl  Bcp.  9r>r>.  Tn  this  case,  certain 
checks  drawn  upon  the  (Icfendant  were  forwarded  to  it  for 
colloftion,  and  the  drawer  not  having  sufficient  funds  on  dcpofrit 
to  pay  them,  the  def<n<laiit  delivered  them  for  protest  to  a  notary 
public,  who  held  thfin  willmiit  protfstiiig  tlicin.  or  giving  notice 
of  dishonor,  and  in  this  way  the  checks  were  retained  for  more 


156  THE   2^EG0T1ABLE  INSTRUMENTS   LAW. 

tbau  two  days  after  their  delivery  to  the  defendant: — Held,  that 
such  retention  of  the  cheeks  by  the  defendant  was  an  acceptance 
within  this  section.  But  it  is  difficult  to  see  how  the  statute 
could  apply  to  such  a  state  of  facts.  It  refers  only  to  cases 
where  the  paper  is  presented  for  acceptance;  but  where  checks  are 
remitted  to  the  drawee  bank,  the  obvious  purpose  is  to  present 
them  for  payment,  and  not  mere  acceptance.  What  the  holder 
desires  in  such  a  case,  is  that  the  bank  shall  remit  the  money, 
not  that  it  shall  return  the  check  with  its  acceptance  placed 
thereon. 

§  226.  Acceptance  of  incomplete  bill. —  A  bill  may  be  ac- 
cepted before  it  has  been  signed  by  the  drawer,  or  while 
otherwise  incomplete,  or  when  it  is  overdue,  or  after  it  has 
been  dishonored  by  a  previous  refusal  to  accept,  or  by  non- 
payment. But  when  a  bill  payable  after  sight  is  dishonored 
by  non-acceptance  and  the  drawee  subsequently  accepts  it, 
the  holder,  in  the  absence  of  any  different  agreement,  is 
entitled  to  have  the  bill  accepted  as  of  the  date  of  the  first 
presentment. 

§  227.  Kinds  of  acceptance. — An  acceptance  is  either  gen- 
eral or  qualified.  A  general  acceptance  assents  without 
qualification  to  the  order  of  the  drawer.  A  qualified  ac- 
ceptance in  express  terms  varies  the  effect  of  the  bill  as 
drawn  (a). 

(a)  Where  a  bill  is  addressed  to  the  drawee  in  one  place,  and  is 
accepted  payable  in  another,  this  is  a  material  variation.  Walker 
V.  Bank  of  State  of  N.  Y.,  13  Barb.  636;  Niagara  Bank  v.  Fair- 
man  Co.,  31  Barb.  403.  But  a  bill  addressed  generally  to  a  drawee 
in  a  city  may  be  accepted  payable  at  a  particular  ba^nk  in  that  city. 
Troy  City  Bank  v.  Lanman,  19  N.  Y.  477;  Meyers  v.  Standart,  11 
Ohio  St.  29.  And  a  bill  so  accepted  is  equivalent  to  a  check. 
See  section  147. 

§  228.  What  constitutes  a  general  acceptancy.* — An 
acceptance  to  pay  at  a  particular  place  is  a  general  accept- 

*  Error  in  engrossing. 


ACCEPTANCE   OF    BILLS    OF    EXCHANGE.  1 57 

ance  unless  it  expressly  states  that  the  bill  is  to  be  paid 
there  only  and  not  elsewhere  (a). 

(a)  Before  the  enactment  of  the  1  and  2  George  IV.,  c.  78,  it 
was  a  point  much  disputed  whether,  if  a  bill  payable  generally  was 
accepted  payable  at  a  particular  place,  such  an  acceptance  was  a 
qualified  one.  Byles  on  Bills,  19i.  The  House  of  Lords  finally 
held  that  an  acceptance  payable  at  a  particular  place  was  a  quali- 
fied acceptance,  rendering  it  necessary,  in  an  action  against  the 
acceptor,  to  aver  and  prove  presentment  at  such  place.  Rome  v. 
Young,  2  Brod.  &  Bing.  165;  2  Bligh,  391.  This  led  to  the  passage 
of  the  statute  above  mentioned,  called  Sergeant  Onslow's  act, 
which  provided  that  an  acceptance  payable  at  a  particular  place 
should  be  deemed  a  general  acceptance  unless  expressed  to  be 
payable  there  "only  and  not  otherwise  or  elsewhere."  In  the 
United  States  the  weight  of  authority  has  been  contrary  to  the 
decision  of  the  House  of  Lords,  and  in  favor  of  the  rule  as  stated 
in  this  section.  Wallace  v.  McConnell,  13  Peters,  136.  See  also 
note  to  section  130. 

§229.  Qualified  acceptance. —  An  acceptance  is  qualified 

which  is : 

1.  Conditional,  that  is  to  say,  which  makes  payment  by 
the  acceptor  dependent  on  the  fulfillment  of  a  condition 
therein  stated  (a)  ; 

2.  Partial,  that  is  to  say,  an  acceptance  to  pay  part  only 
of  the  amount  for  which  the  bill  is  drawn ; 

3.  Lrjcal  that  is  to  say,  an  acceptance  to  pay  only  at  a 
particular  place; 

4.  Qualified  as  to  time; 

5.  The  acceptance  of  some  one  or  more  of  the  drawees, 
but  not  of  all. 

(a)  Such  an  acceptance  does  not  become  duo  until  the  hai)pen- 
ing  of  the  contingency  upon  which  the  bill  is  accepted.  Brockway 
V.  Allen.  17  Wend.  40;  N.wliall  v.  Clark,  3  Cush.  376;  Myrick  v. 
Merritt,  22  Fla.  335;  Marshall  v.  Burnby,  25  Fla.  619. 


158  THE   NEGOTIABLE  INSTRUMENTS   LAW. 

§  230.  Rights  of  parties  as  to  qualified  acceptance. —  The 
holder  may  refuse  to  take  a  quahfied  acceptance,  and  if  he 
does  not  obtain  an  unqualified  acceptance,  he  may  treat  the 
hill  as  dishonored  by  non-acceptance  (a).  Where  a  quali- 
fied acceptance  is  taken,  the  drawer  and  indorsers  are  dis- 
charged from  liability  on  the  bill,  unless  they  have  expressly 
or  impliedly  authorized  the  holder  to  take  a  qualified  ac- 
ceptance, or  subsequently  assent  thereto.  When  the  drawer 
or  an  indorser  receives  notice  of  a  qualified  acceptance,  he 
must  within  a  reasonable  time  express  his  dissent  to  the 
holder,  or  he  will  be  deemed  to  have  assented  thereto. 

(a)  Cline  v.  Miller,  8  Md.  274.  But  if  ho  receives  such  an  ac- 
ceptance he  can  claim  payment  only  according  to  the  condition 
or  qualification.  (Id.)  An  agent  for  collection,  as,  for  example, 
a  bank,  has  no  authority  to  receive  anything  short  of  an  explicit 
and  unqualified  acceptance.  Walker  v.  New  York  State  Bank,  9 
N.  Y.  582. 


PRESENTATION   BILLS  OF  EXCHANGE  FOR  ACCEPTANCE.    1 59 


ARTICLE  XII. 

Presentment  of  Bills  of  Exchange  for  Acceptance. 

Section  240.  When   presentment    for   acceptance   must  be 
made. 

241.  \\'hen  failure  to  present  releases  drawer  and 

indorser. 

242.  Presentment ;  how  made. 

243.  On  what  days  presentment  may  be  made. 

244.  Presentment ;  where  time  is  insufficient. 

245.  \\'hen  presentment  is  excused. 

246.  When  dishonored  by  non-acceptance. 

247.  Duty  of  holder  where  bill  not  accepted. 

248.  Rights  of  holder  where  bill  not  accepted. 

§  240.  When  presentment  for  acceptance  must  be  made. 
—  Presentment  for  acceptance  must  be  made : 

1.  Where  the  bill  is  payable  after  sight  or  in  any  other 
case  where  presentment  for  acceptance  is  necessary  in  order 
to  fix  the  maturity  of  the  instrument  (a)  ;  or 

2.  Where  the  bill  expressly  stipulates  that  it  shall  be  pre- 
sented for  acceptance ;  or 

3.  Where  the  bill  is  drawn  payable  elsewhere  than  at 
the  residence  or  place  of  business  of  the  drawee. 

In  no  other  case  is  presentment  for  acceptance  necessary 
in  order  to  render  any  party  to  the  bill  liable. 

(a)  Although  wlicii  a  bill  i.s  made  payable  at  a  day  certain,  as 
at  a  fixed  time  after  its  date,  presentment  for  acceptance  before 
that  time  is  not  necessary  in  (>r<\vr  to  charfre  the  drawer  or  in- 
dorsers,  yet  where  a  bank  receives  six  li  a  Mil  for  collection,  its 
duty  is  to  present  the  bill  for  acceptance  witliout  delay.  For  it 
is  to  tlio  owner's  interest  that  the  bill  should  be  so  accepted,  as 


iOO  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

only  by  accept iuj::  it  docs  tlic  drawee  become  bound  to  pay  it, 
and  until  such  acceptance  the  owner  has  for  his  debtor  only  the 
drawer,  and  the  step  is  one  which  a  prudent  man  of  business, 
ordinarily  careful  of  his  own  interests,  would  take  for  his  protec- 
tion. AlU'u  r.  Suydani,  17  Wciid.  I!(!S.  A  bill  payable  at  a  fixed 
period  from  its  date  may  be  presented  for  acceptance  at  any  time. 
Bachellor  c.  Priest,  12  Pick.  3U9;  Oxford  Bank  i-.  Davis,  4  Gush. 
188. 

§  241.  When  failure  to  present  releases  drawer  and  in- 
dorser. —  Except  as  herein  otherwise  provided,  the  holder 
of  a  bill  which  is  required  by  the  next  preceding-  section  to 
be  presented  for  acceptance  must  either  present  it  for  ac- 
ceptance or  negotiate  it  within  a  reasonable  time  (a).  If 
he  fails  to  do  so,  the  drawer  and  all  indorsers  are  dis- 
charged. 

(a)  Robinson  v.  Ames,  20  Johns.  146;  Gowan  v.  Jackson,  20 
Johns.  170 ;  Wallace  v.  Agry,  4  Mason,  333 ;  Prescott  Bank  v.  Cov- 
erly,  7  Gray,  217;  Walsh  v.  Dort,  23  Wis.  334;  Phoenix  Ins.  Co.  v. 
Allen,  11  Mich.  30;  Goupy  v.  Harden,  7  Taunt.  397.  A  delay  of 
the  mail  is  a  sufficient  excuse  for  the  omission  to  immediately 
present  a  bill  for  acceptance;  and  a  presentation  immediately 
after  its  reception  is  in  time  to  charge  the  indorger.  Walsh  v. 
Blatchley,  6  Wis.  422. 

§  242.  Presentment ;  how  made. —  Presentment  for  ac- 
ceptance must  be  made  by  or  on  behalf  of  the  holder  at  a 
reasonable  hour  (a),  on  a  business  day,  and  before  the  bill 
is  overdue,  to  the  drawee  or  some  person  authorized  to 
accept  or  refuse  acceptance  on*  behalf  (b)  ;  and 

1.  Where  a  bill  is  addressed  to  two  or  more  drawees  who 
are  not  partners,  presentment  must  be  made  to  them  all 
(c),  unless  one  has  authority  to  accept  or  refuse  acceptance 
for  all,  in  which  case  presentment  may  be  made  to  him  only ; 

2.  Where  the  drawee  is  dead,  presentment  may  be  made 
to  his  personal  representative  (d); 

*  Through  error  in  engrossing  word  "  his  "  omitted. 


PRESENTATION   BILLS  OF  EXCHANGE  FOR  ACCEPTANCE.    l6l 

3.  Where  the  drawee  has  been  adjudged  a  bankrupt  or 
an  insolvent,  or  has  made  an  assignment  for  the  benefit  of 
creditors,  presentment  may  be  made  to  him  or  to  his  trustee 
or  assignee. 

(a)  Cayuga  County  Bank  v.  Hunt,  2  Hill,  635. 

(6)  Byles  on  Bills,  182.  The  holder  may  require  the  production 
by  the  agent  of  a  clear  and  explicit  authority  from  his  principal  to 
accept  in  his  name,  and  without  its  production  may  treat  the  bill 
as  dishonored.     Daniel  on  Negotiable  Instruments,  section  487. 

(c)  But  if  one  of  the  drawees  accepts  he  will  be  bound  by  his 
acceptance.     Smith  v.  Melton,  133  Mass.  369. 

(d)  Presentment  in  such  case  is  not  necessary.  See  section  245. 
But  as  it  will  be  convenient  in  most  instances  to  have  the  bill 
duly  protested,  it  is  well  to  have  some  one  designated  to  whom 
presentment  can  be  made. 

§  243.  On  what  days  presentment  may  be  made. —  A  bill 
may  be  presented  for  acceptance  on  any  day  on  which 
negotiable  instruments  may  be  presented  for  payment  under 
the  provisions  of  sections  one  hundred  and  thirty-two  and 
one  hundred  and  forty-five  of  this  act.  When  Saturday 
is  not  otherwise  a  holiday,  presentment  for  acceptance  may 
be  made  before  twelve  o'clock  noon  on  that  day. 

§  244.  Presentment  where  time  is  insufficient. —  W^here 
the  holder  of  a  hill  drawn  payable  elsewhere  than  at  the 
place  of  business  or  the  residence  of  the  drawee  has  not 
time  with  the  exercise  of  reasonable  diligence  to  present  the 
bill  for  acceptance  before  presenting  it  for  payment  on  the 
day  that  it  falls  due,  the  delay  caused  by  presenting  the  bill 
for  acceptance  bef(jre  presenting  it  for  pa>Tnent  is  excused 
and  does  not  discharge  the  drawers  and  indorsers. 

§  245.  Where  presentment  is  excused. —  Presentment  for 
acceptance  is  excused  and  a  bill  may  be  treated  as  dishonored 
by  non-acceptance  in  either  of  the  following  cases : 

I.  Where  the  drawee  is  dead  (a),  or  has  absconded,  or  is 
n 


l62  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

a  fictitious  person  or  a  person  not  having  capacity  to  contract 
bv  bill : 

J.  W  here  after  the  exercise  of  reasonable  diligence,  pre- 
sentment cannot  be  made  {b)  ; 

3.  Where,  although  presentment  has  been  irregular,  ac- 
ceptance has  been  refused  on  some  other  ground. 

(a)  Prior  to  the  statute  there  was  some  doubt  as  to  the  proper 
course  in  this  case.  See  Daniel  on  Negotiable  Instruments,  section 
1178. 

(b)  As  to  what  will  constitute  due  diligence,  see  Sulsbacker  v. 
Bank  of  Charleston,  8G  Tenn.  201. 

§  246.  When  dishonored  by  non-acceptance. —  A  bill  is 
dishonored  by  non-acceptance: 

1.  When  it  is  duly  presented  for  acceptance,  and  such  an 
acceptance  as  is  prescribed  by  this  act  is  refused  or  cannot 
be  obtained ;  or 

2.  When  presentment  for  acceptance  is  excused  and  the 
bill  is  not  accepted. 

§  247.  Duty  of  holder  where  bill  not  accepted. —  Where 
a  bill  is  duly  presented  for  acceptance  and  is  not  accepted 
within  the  prescribed  time,  the  person  presenting  it  must 
treat  the  bill  as  dishonored  by  non-acceptance  or  he  loses 
the  right  of  recourse  against  the  drawer  and  indorsers. 

§  248.  Rights  of  holder  where  bill  not  accepted. —  When 
a  bill  is  dishonored  by  non-acceptance,  an  immediate  right 
of  recourse  against  the  drawers  and  indorsers  accrues  to 
the  holder,  and  no  presentment  for  payment  is  necessary  (a). 

(a)  Sterry  r.  Robinson,  1  Day  (Conn.),  11. 


PROTEST  OF  BILLS  OF  EXCHANGE.  163 

ARTICLE  XIII. 
Protest  of  Bills  of  Exchange. 

Section  260.  In  what  cases  protest  necessary. 

261.  Protest;  how  made. 

262.  Protest;  by  whom  made. 

263.  Protest ;  when  to  be  made. 

264.  Protest;  where  made. 

265.  Protest  both  for  non-acceptance  and  non-pay- 

ment. 

266.  Protest  before  maturity  where  acceptor  insol- 

vent. 

267.  When  protest  dispensed  with. 

268.  Protest;  where  bill  is  lost,  et  cetera. 

§  260.  In  what  cases  protest  necessary. —  Wliere  a  foreign 
bill  appearing  on  its  face  to  be  such  is  dishonored  by  non- 
acceptance,  it  must  be  duly  protested  for  non-acceptance, 
and  where  such  a  bill  which  has  not  previously  been  dis- 
honored by  non-acceptance  is  dishonored  by  non-payment, 
it  must  be  duly  protested  for  non-payment.  If  it  is  not  so 
protested,  the  drawer  and  indorsers  are  discharged  (a). 
Where  a  bill  does  not  appear  on  its  face  to  be  a  foreign  bill, 
protest  thereof  in  case  of  dishonor  is  unnecessary  (b). 

(a)  Commercial  Bank  v.  Varnum,  49  N.  Y.  269,  275;  ITalliday 
V.  McDouffall,  20  Wond.  81;  Donnistouii  v  Stewart,  17  How. 
(U.  S.)  606;  Pha-nix  Bank  v.  TTussey,  12  Pick.  483.  Protest  is 
indispensable,  and  the  proof  cannot  be  supplied  in  any  other  way. 
Joseph  r.  Solomon,  19  J'la.  623.  There  are  several  reasons  why 
protest  is  required  in  such  cases:  (1)  for  the  sake  of  uniformity 
in  international  transactions;  (2)  because  it  affords  satisfactory 
evidence  of  dishonor  to  the  drawer,  who,  from  his  residence  abroad, 
might  experience  a  difficulty  in   makiiif;  iixjuirics  on    tho  frubject 


104  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

and   be  oouipelknl    to  rely  on  the   representations  of  the  holder; 
(,3)   because,  as  foreign  courts  give  credit  tt)  the  acts  of  a  public 
functionary,  the  protest  atlords  the  most  satisfactory  evidence  to 
charge  an  antecedent  party.    Jiyles,  25G. 
ih)  See  sections  18'.)  and  213. 

§  261.  Protest;  how  made.— The  protest  must  be  annexed 
to  the  bill,  or  must  contani  a  copy  thereof  (a),  and  must  be 
under  the  hand  {b)  and  seal  (c^)  of  the  notary  making  it, 
and  must  specify : 

1.  The  time  {d)  and  place  (c)  of  presentment; 

2.  The  fact  that  presentment  was  made  and  the  manner 
thereof ; 

3.  The  cause  or  reason  for  protesting  the  bill ;  , 

4.  The  demand  made  and  the  answer  given,  if  any,'  or 
the  tact  that  the  drawee  or  acceptor  could  not  be  found  (/). 

(a)   Fulton  v.  MacCracken,  18  Md    528. 

(6)  The  signature  of  the  notary  may  be  printed.  Bank  of 
Cooperstown  i-.  Woods,  28  ISI.  Y.  561;  Fulton  v.  MacCracken,  18 
Md   528. 

(c)  IJonegan  v.  Wood,  49  Ala.  251  In  other  cases  it  has  been 
held  that  the  official  signature  is  all  that  is  required  lluffuker  v. 
National  Bank,  12  Bush.  293.  When  the  court  can  perceive  that 
a  seal  is  attached  thereto  the  protest  is  sufficiently  authenticated; 
neither  the  seal  nor  the  signature  of  the  notary  need  be  proved. 
Barry  v.  Crowly,  4  Gill  (Md.)    194. 

(d)  In  the  case  of  a  note,  the  statement  in  a  notarial  certificate 
that  it  was  presented  on  a  certain  day  is  not  conclusive  upon  the 
parties,  but  evidence  is  admissible  to  show  that  presentment  was 
also  made  on  another  day.     Reynolds  f.  Appleman,  41  Md.  615. 

(e)  A  certificate  of  a  notary  which  states  that  he  presented  a 
note  for  payment  at  a  certain  town  and  demanded  payment,  which 
was  refused,  but  did  not  state  to  whom  or  at  what  place  in  the 
town  it  was  presented,  does  not  show  &uch  a  presentation  to  the 
maker  as  will  bind  the  indorser.  Duckert  v.  Von  Lilienthal,  11 
Wis.  56. 

(/")  The  notarial  certificate  of  protest  is  competent,  without  fur- 
ther proof.    This  has  often  been  so  held  in  lespect  to  foreign  bills. 


PROTEST  OF  BILLS  OF  EXCHANGE.  I65 

Porter  v.  Judson,  1  Gray,  175;  Pierce  v.  Indseth,  106  U.  S.  546, 
Browne  i'.  Philadelphia  Bank,  6  S.  &  R.  484;  Coruth  i;.  Walker,  8 
Wis.  252.  For  this  purpose  the  diiferent  States  of  the  Union  are 
deemed  foreign  to  each  other,  so  that  the  notarial  certificate  of 
protest  under  seal  is  good  on  mere  production.  Townsley  v.  Sum- 
rail,  2  Pet.  170;  Ilalliday  v.  McDougall,  20  Wend.  81;  Carter  v. 
Burley,  9  K  H.  558,  566;  Johnson  v.  Brown,  154  Mass.  105,  106. 
The  statement  in  the  certificate  that  notice  of  dishonor  has  been 
given  is  also  received  as  evidence.  Barry  v.  Crowly,  4  Gill  (Md.) 
194;  Rosson  v.  Carroll,  90  Tenn.  90;  Legg  v.  Vinal,  165  Mass, 
555.  But  the  notary's  certificate  is  not  evidence  of  other  collateral 
or  independent  facts  it  may  contain,  especially  when  such  facts 
are  not  necessarily  within  the  personal  knowledge  of  the  notary, 
or  are  of  such  a  character  as  could  not  be  established  by  his  testi- 
mony if  he  were  produced  as  a  witness.  W^eems  v.  Farmers'  Bank, 
15  Md.  231.  Thus,  the  statement  that  the  party  on  whom  the 
demand  was  made  was  "  one  of  the  administrators "  of  the  ac- 
ceptor, does  not  establish  the  facts  of  the  death  of  the  acceptor, 
and  of  the  granting  of  letters  of  administration  on  his  estate  to 
such  party.  (Id.)  So  the  words  "  after  diligent  search  and  in- 
quiry to  ascertain  his  whereabouts "  are  not  admissible  as  evi- 
dence of  such  "  diligent  search  and  inquiry  "  having  been  made ; 
for  this  is  a  conclusion  of  law  which  the  notary  could  not  legally 
draw  or  establish  by  his  own  testimony.  Reier  v.  Strauss,  54 
Md.  278.  See  also  Ricketts  v.  Pendleton,  14  Md.  320;  Duckert  v. 
Von  Lilienthal,  11  Wis.  56;  Sumner  v.  Bowen,  2  Wis.  524;  Adams 
V.  Wright,  14  Wis.  408.  A  notarial  certificate  of  protest  is  evi- 
dence of  the  facts  therein  set  forth,  although  the  notary,  when 
examined,  has  no  recollection  of  them.  Rosson  v.  Carroll,  90 
Tenn.  90;  Sherer  v.  Faston  Bank,  33  Pa.  St.  134.  And  the  entries 
of  a  deceased  notary  in  his  register  are  admissible.  Spann  v. 
Baltzcll,  1  Fla.  301 ;  Porter  v.  Judson,  1  Gray,  175.  When  a 
notary  has  neglected  to  keep  a  record  of  the  notice  which  he  has 
served  on  the  non-payment  of  a  note,  his  oral  testimony  is  admis- 
sible to  prove  its  contents.  Terbcll  v.  Jones,  15  Wis.  253.  Whore 
the  protest  is  exclusively  relied  upon  to  provo  the  necessary  facts 
to  fix  liahility  iiiimi  the  parties  to  be  affcctrd,  it  must  contain 
sufficient  averments  to  show  that  everytliing  rc«iuisitc  has  been 
done  on  the  part  of  the  holder,  or  his  agent,  to  authori/e  the 
<lemand  upon  the  indorser.  People's  P>ank  v.  Brooke,  31  ^Md.  7. 
For  a  case  where  the  ))rotest  was  insufficient  see  Mason  v.  Kil- 
course,  71  N.  J.  Law.  472,  473-474. 


iGCt  Tllli    iNE(J011ABLE   INSTRUMENTS    LAW. 

§262.  Protest;  by  whom  made. —  i'rolest  mav  be  made 
by: 

1.  A  notary  public  (a)  ;  or 

J.  By  any  respectable  resident  of  the  place  where  the  bill 
is  dishonored,  in  the  presence  of  two  or  more  credible  wit- 
nesses (^). 

(rt)  It  would  seem  that,  in  the  absence  of  any  custom  or  usage 
on  the  subject,  the  presoiitnient  and  demand  must  be  made  by  the 
notary  in  person.  Commercial  Bank  v.  Varnum,  49  N.  Y.  269, 
275 ;  Ocean  Nat.  Bank  v.  Williams,  102  Mass.  141.  A  notary  who 
is  an  officer  of  a  bank  may  legally  protest  paper  belonging  to  the 
bank.  Nelson  v.  First  National  Bank,  69  Fed.  Rep.  798;  29  U.  S. 
App.  554.  And  though  he  is  also  a  stockholder  in  the  bank.  More- 
land's  Assignee  v.  Citizens'  Savings  Bank,  97  Ky.  211.  And 
it  has  been  held  that  the  cashier  of  a  bank  who  is  a  notary  may 
legally  protest  his  own  note  which  has  been  discounted  by  the 
bank.     Dykman  v.  Northridge,  1  App.  Div.  (N.  Y.)  26. 

(h)  Todd  V.  NeaFs  Administrator,  49  Ala.  273, 

§  263.  Protest ;  when  to  be  made. —  When  a  bill  is  pro- 
tested, such  protest  must  be  made  on  the  day  of  its  dishonor, 
unless  delay  is  excused  as  herein  provided.  When  a  bill 
has  been  duly  noted,  the  protest  may  be  subsequently  ex- 
tended as  of  the  date  of  the  noting  (a). 

(a)  The  protest  should  be  commenced,  at  least  (and  such  an 
incipient  protest  is  called  noting),  on  the  day  on  which  accept- 
ance or  payment  is  refused ;  but  it  may  be  drawn  up  and  com- 
pleted at  any  time  before  the  commencement  of  the  suit,  or  even 
before  or  during  the  trial,  and  ante-dated  accordingly.  Byles  on 
Bilk,  257. 

§  264.  Protest ;  where  made. —  A  hill  must  be  protested 
at  the  place  where  it  is  dishonored  (a),  except  that  when  a 
bill  drawn  payable  at  the  place  of  business  or  residence  of 
some  person  other  than  the  drawee,  has  been  dishonored  by 
non-acceptance,  it  must  be  protested  for  non-payment  at  the 


PROTEST  OF  BILLS  OF  EXCHANGE.  167 

place  where  it  is  expressed  to  be  payable,  and  no  further  pre- 
sentment for  payment  to,  or  demand  on,  the  drawee  is  neces- 
sary {h). 

(a)   See  Daniel  on  Neg.  Inst.,  section  935 ;  Byles  on  Bills,  257. 
(fe)  3  William  IV.  Ch.  98;  Daniel  on  Neg.  Inst.,  section  935; 
Byles  on  Bills,  258. 

§  265.  Protest  both  for  non-acceptance  and  non-payment. 
— A  bill  which  has  been  protested  for  non-acceptance  may 
be  subsequently  protested  for  non-payment. 

§  266.  Protest  before  maturity  where  acceptor  insolvent. 
— Where  the  acceptor  has  been  adjudged  a  bankrupt  or  an 
insolvent,  or  has  made  an  assignment  for  the  benefit  of 
creditors,  before  the  bill  matures,  the  holder  may  cause  the 
bill  to  be  protested  for  better  security  against  the  drawer 
and  indorsers. 

§  267.  When  protest  dispensed  with. — Protest  is  dis- 
pensed with  by  any  circumstances  which  would  dispense 
with  notice  of  dishonor.  Delay  in  noting  or  protesting  is 
excused  when  delay  is  caused  by  circumstances  beyond  the 
control  of  theji^older  and  not  imputable  to  his  default,  mis- 
conduct, or  negligence.  When  the  cause  of  delay  ceases 
to  operate,  the  bill  must  be  noted  or  protested  with  reason- 
able diligence. 

§  268.  Protest  where  bill  is  lost,  et  cetera. —  Where  a  bill 
is  lost  or  destroyed  or  is  wrongfully  detained  from  the  per- 
son entitled  to  hold  it,  protest  may  be  made  on  a  copy  or 
written  particulars  thereof  {a). 

(a)  Hinsdale  v.  Miles,  5  Conn.  331.  Loss  of  the  instrninoijit 
does  not  excuse  doinand  and  protest.  Daniel  on  Negotiable  Instru- 
ments, section  14G-4.     See  also  section  245. 


108  THE    NEGOTIABLE   INSTRUMENTS    LAW. 


ARTICLE  XIV. 
Acceptance  of  Bills  of  Exchange  for  Honor. 

Section  280.  When  bill  may  be  accepted  for  honor. 

281.  Acceptance  for  honor;  how  made. 

282.  When  deemed  to  be  an  acceptance  for  honor 

of  the  drawer. 

283.  Liability  of  acceptor  for  honor. 

284.  Agreement  of  acceptor  for  honor. 

285.  Maturity  of  bill  payable  after  sight ;  accepted 

for  honor. 

286.  Protest  of  bill  accepted  for  honor,  et  cetera. 

287.  Presentment    for    payment    to    acceptor    for 

honor;  how  made. 

288.  When   delay    in   making   presentment  is  ex- 

cused. 

289.  Dishonor  of  bill  by  acceptor  for  honor. 

§  280.  When  bill  may  be  accepted  for  honor. —  Wliere  a 
bill  of  exchange  has  been  protested  for  dishonor  by  non- 
acceptance  or  protested  for  better  security  and  is  not  over- 
flue,  any  i>erson  not  being  a  party  already  liable  thereon 
may,  with  the  consent  of  the  holder,  intervene  and  accept 
the  bill  supra  protest  for  the  honor  of  any  party  liable 
thereon  or  for  the  honor  of  the  person  for  whose  account 
the  bill  is  drawn.  The  acceptance  for  honor  may  be  for  part 
only  of  the  sum  for  which  the  bill  is  drawn ;  and  where  there 
has  been  an  acceptance  for  honor  for  one  party,  there  may 
be  a  further  acceptance  by  a  different  person  for  the  honor 
of  another  party  (a). 

(a)  Byles  on  Bills,  262-266. 


ACCEPTANCE  OF  BILLS   OF   EXCHANGE  FOR   HONOR.        1 69 

§  281.  Acceptance  for  honor;  how  made. —  An  acceptance 
for  honor  supra  protest  must  be  in  writing  and  indicate  that 
it  is  an  acceptance  for  honor,  and  must  be  signed  by  the 
acceptor  for  honor. 

§  282.  When  deemed  to  be  an  acceptance  for  honor  of  the 
drawer. —  Where  an  acceptance  for  honor  does  not  expressly 
state  for  whose  honor  it  is  made,  it  is  deemed  to  be  an 
acceptance  for  the  honor  of  the  drawer. 

§  283.  LiabiHty  of  acceptor  for  honor. —  The  acceptor  for 
honor  is  hable  to  the  holder  and  to  all  parties  to  the  bill  sub- 
sequent to  the  party  for  whose  honor  he  has  accepted  (a). 

(a)  The  acceptor  for  the  honor  of  the  drawer  cannot  mai-ntaiii 
an  action  thereon  against  him  without  proof  of  its  presentment  to 
the  drawee  and  non-acceptance  or  non-payment  by  him,  and  notice 
thereof  to  the  drawer.     Baring  v.  Clark,  19  Pick.  220. 

§  284.  Agreement  of  acceptor  for  honor. —  The  acceptor 
for  honor  by  such  acceptance  engages  that  he  will  on  dtie 
presentment  pay  the  bill  according  to  the  terms  of  his  ac- 
ceptance, provided  it  shall  not  have  been  paid  by  the  drawee, 
and  provided  also  that  it  shall  have  been  duly  presented 
for  payment  and  protested  for  non-payment  and  notice  of 
dishonor  given  to  him. 

§285.  Maturity  of  bill  payable  after  sight;  accepted  for 
honor. —  Where  a  ImII  payable  after  sight  is  accejjtcd  for 
honor,  its  maturity  is  calculated  from  the  date  of  the  noting 
for  non-acceptance  and  not  from  tlic  date  of  the  acceptance 
for  honor. 

§  286.  Protest  of  bill  accepted  for  honor,  et  cetera. — 
Where  a  (hshonnix-*!  l»ill  has  been  acce])ted  for  honor  suj)ra 
protest  or  contains  a  reference  in  case  of  need,  it  must  be 


170  THE    NEGOTIABLE   INSTRUMENTS    EAVV. 

protestetl   for  non-payiiiciit  l)cforc  it  is  presented  for  pay- 
ment to  the  accei)tor  for  honor  or  referee  in  case  of  need. 

§287.  Presentment  for  payment  to  acceptor  for  honor; 
how  made. —  rresentnient  lor  payment  to  the  acceptor  for 
honor  must  be  made  as  follows : 

1.  If  it  is  to  be  presented  in  the  place  where  the  protest 
for  non-payment  was  made,  it  must  be  presented  not  later 
than  the  day  following  its  maturity ; 

2.  If  it  is  to  be  presented  in  some  other  place  than  the 
place  where  it  was  protested,  then  it  must  be  forwarded 
within  the  time  specified  in  section  one  hundred  and  seventy- 
five    ( a ) . 

(a)  Doubts  having  arisen  as  to  the  day  when  the  bill  should  be 
again  presented  to  the  acceptor  for  honor,  or  referee  in  case  of 
need,  for  payment,  the  G  and  7  Will.  4,  c.  58,  enacted  that  it  should 
not  be  necessary  to  present,  or  in  case  the  acceptor  for  honor  or 
referee  live  at  a  distance,  to  forward  for  presentment,  till  the  day 
following  that  on  which  the  bill  becomes  due.    Byles  on  Bills,  263. 

§  288.  When  delay  in  making  presentment  is  excused. — 
The  provisions  of  section  one  hundred  and  forty-one  apply 
where  there  is  delay  in  making*  presentment  to  the  acceptor 
for  honor  or  referee  in  case  of  need. 

§  289.  Dishonor  of  bill  by  acceptor  for  honor. —  When 
the  bill  is  dishonored  by  the  acceptor  for  honor  it  must  be 
protested  for  non-payment  by  him. 


PAVMEXT    OF    BILLS   OF    EXCHANGE   FOR    HOXOR.       I/I 


ARTICLE  XV. 
Payment  of  Bills  of  Exchange  for  Honor. 

Section  300.  Who  may  make  payment  for  honor. 

301.  Payment  for  honor;  how  made. 

302.  Declaration  before  payment  for  honor. 

303.  Preference    of    parties    offering    to    pay    for 

honor. 

304.  Effect  on  subsequent  parties  where  bill  is  paid 

for  honor. 

305.  Where  holder  refuses  to  receive  payment  supra 

protest. 

306.  Rights  of  payer  for  honor. 

§  300.  Who  may  make  payment  for  honor. —  Where  a  bill 
has  been  protested  for  nun-payment,  any  person  may  in- 
tervene and  pay  it  supra  protest  for  the  honor  of  any  per- 
son liable  thereon  or  for  the  honor  of  the  person  for  whose 
account  it  was  drawn  (a). 

(a)  Byles  on  Bills,  267-269 ;  Daniel  on  Neg.  Inst.,  section  1254. 

§  301.  Payment  for  honor;  how  made. —  The  payment  for 
honor  supra  protest  in  order  to  operate  as  such  and  not 
as  a  mere  voluntary  payment  must  be  attested  by  a  notarial 
act  of  honor,  which  may  be  appended  to  the  protest  or  form 
an  extension  to  it  (a). 

(a)  Byles  on  Bills,  267;  Daniel  on  Neg.  Inst.,  section  12.58.  A 
stranger  to  the  drawer  and  indorser  of  a  non-accepted  bill  may 
inter\-ene  supra  protest  to  pay  the  same  for  the  honor  of  the  in- 
dorser or  drawer.  Konig  v.  Bayard,  1  Pet.  250.  And  it  is  no 
objection  to  this  intervention  that  it  has  been  done  at  the  request 
and  under  the  guarantee  of  the  drawer  who  had  refused  accept- 
ance or  payment.     (Id.) 


\J2  THE    NEGOTIABLE  INSTRUMENTS    LAW. 

Jj  302.  Declaration  before  payment  for  honor. —  The  no- 
tarial act  of  honor  must  be  founded  on  a  declaration  made 
by  the  payer  for  honor,  or  by  his  agent  in  that  behalf  de- 
claring his  intention  to  pay  the  bill  for  honor  and  for  whose 
honor  he  pays. 

§  303.  Preference  of  parties  offering  to  pay  for  honor. — 
Where  two  or  more  persons  offer  to  pay  a  bill  for  the  honor 
of  different  parties,  the  person  whose  payment  will  discharge 
most  parties  to  the  bill  is  to  be  given  the  preference. 

§  304.  Effect  on  subsequent  parties  where  bill  is  paid  for 
honor. —  \\  here  a  bill  has  been  paid  for  honor  all  parties 
subsequent  to  the  party  for  whose  honor  it  is  paid  are  dis- 
charged, but  the  payer  for  honor  is  subrogated  for,  and 
succeeds  to,  both  the  rights  and  duties  of  the  holder  as  re- 
gards the  party  for  whose  honor  he  pays  and  all  parties  liable 
to  the  latter  (a). 

(a)  Daniel  on  Neg.  Inst,  section  1255. 

§  305-  Where  holder  refuses  to  receive  payment  supra 
protest. —  Where  the  holder  of  a  bill  refuses  to  receive  pay- 
ment supra  protest,  he  loses  his  right  of  recourse  against 
any  party  who  would  have  been  discharged  by  such  payment. 

§  306.  Rights  of  payer  for  honor.—  The  payer  for  honor, 
on  paying  to  the  holder  the  amount  of  the  bill  and  the 
notarial  expenses  incidental  to  its  dishonor,  is  entitled  to 
receive  both  the  bill  itself  and  the  protest. 


BILLS  IN   A  SET.  173 


ARTICLE  XVL 
Bills  in  a  Set. 

Section  310.  Bills  in  sets  constitute  one  bill. 

311.  Rights  of  holders  where  different  parts  are 

negotiated. 

312.  Liability  of  holder  who  indorses  two  or  more 

parts  of  a  set  to  different  persons. 

313.  Acceptance  of  bills  drawn  in  sets. 

314.  Payment  by  acceptor  of  bills  drawn  in  sets. 

315.  Effect  of  discharging  one  of  a  set. 

§310.  Bills  in  sets  constitute  one  bill.— Where  a  bill  is 
drawn  in  a  set.  each  part  of  the  set  bemg  numbered  and 
containing  a  reference  to  the  other  parts,  the  whole  of  the 
parts  constitute  one  bill  (a). 

(a)  Byles  on  Bills,  387;  Daniel  on  Neg.  Inst,  section  113;  Dur- 
kin  V.  Cranston,  7  Johns.  442. 

^311.  Rights  of  holders  where  different  parts  are  nego- 
tiated.— Where  two  or  more  parts  of  a  set  are  negotiated 
to  different  holders  in  due  course,  the  holder  whose  title 
first  accrues  is  as  between  such  holders  the  true  owner  of 
the  bill  (a).  But  nothing  in  this  section  affects  the  rights 
of  a  person  who  in  due  course  accepts  or  pays  the  part  first 
presented  to  him. 

(a)  Byleg  on  Bills,  389;  Walsh  v.  Blatchley,  6  Wis.  422. 

§  312.  Liability  of  holder  who  indorses  two  or  more  parts 
of  a  set  to  different  persons.—  Where  the  holder  of  a  set 
indorses  two  or  more  parts  tr,  different  persons  he  is  liable 
on  every  such  part,  and  every  indorser  subse^iuent  to  him 


174  THE    NEGOTIABLE   INSTRUMENTS    LAW. 

is   liable  (.)!!  the  pari  he  has  iunisclf  iiulorscd,  as  if  such 
parts  were  separate  bills  (a), 

(a)  Holdsvvorth  c.  Hunter,  10  C.  B.  449;  Byles  on  Bills,  389. 

§  313.  Acceptance  of  bills  drawn  in  sets. —  The  acceptance 
may  be  written  on  any  part,  and  it  must  be  written  on  one 
part  only.  If  the  drawee  accepts  more  than  one  part,  and 
such  accepted  parts  are  negotiated  to  different  holders  in 
due  course,  he  is  liable  on  every  such  part  as  if  it  were  a 
separate  bill  (a). 

(a)  Holdsworth  v.  Hunter,  10  C.  B.  449;  Byles  on  Bills,  389. 
Either  of  the  set  may  be  presented  for  acceptance,  and  if  not  ac- 
cepted a  right  of  action  arises,  upon  due  notice,  against  the  in- 
dorser.  Dounes  &  Co.  v.  Church,  13  Peters,  205 ;  Walsh  v.  Blatch- 
ley,  6  Wis.  422,  425. 

§  314.  Payment  by  acceptor  of  bills  in  drawn  sets. — 
When  the  acceptor  of  a  bill  drawn  in  a  set  pays  it  without 
recjuiring  the  part  bearing  his  acceptance  to  be  delivered  up 
to  him,  and  that  part  at  maturity  is  outstanding  in  the  hands 
of  a  holder  in  due  course,  he  is  liable  to  the  holder  thereon 
(a). 

(a)  Byles  on  Bills,  389. 

§  315.  Effect  of  discharging  one  of  a  set. —  Except  as 
herein  otherw'ise  provided,  w'here  any  one  part  of  a  bill 
drawn  in  a  set  is  discharged  by  payment  or  otherwise  the 
whole  bill  is  discharged  (a). 

(a)  Byles  on  Bills,  388. 


PROMISSORY  NOTES  AND  CHECKS.  ^75 


ARTICLE  XVII. 
Promissory  Notes  and  Checks. 

Section  320.  Promissory  note  defined. 

321.  Check  defined. 

322.  Within  what  time  a  check  must  be  presented. 

323.  Certification  of  check;  effect  of. 

324.  Effect  where  holder  of  check  procures  it  to  be 

certified. 

325.  When  check  operates  as  an  assignment. 

^  320.  Promissory  note  defined. — A.  negotiable  promis- 
sory note  within  the  meaning  of  this  act  is  an  unconditional 
promise  in  writing  made  by  one  person  to  another,  signed 
by  the  maker,  engaging  to  pay  on  demand  or  at  a  fixed  or 
determinable  future  time  a  sum  certain  in  money  to  order 
or  to  bearer  (a).  Where  a  note  is  drawn  to  the  maker's 
own  order,  it  is  not  complete  until  indorsed  by  him  (b). 

(a)  This  section  makes  a  change  in  the  law  of  New  York  as 
regards   the   presumption   of   consideration   in    the   case   of   non- 
negotiable  notes.     The  terms  of  the  former  New  York  statute  in^ 
eluded  a  note  payable  to  a  person  named  therein  without  words 
of  negotiability.     Carnwright  v.  Gray,  127  N.  Y.  92.    But  as  that 
statute  has  been  repealed,  and  as  the  provisions  of  the  Negotiable 
Instruments  Law  apply  only    to  negotiable  promissory  notes,  it  is 
now  necessary  to  prove  consideration  in  actions  upon  non-negoti- 
able notes.     Deyo  v.  Thoinpsnn.  n?,  App.  Div.   (X.  Y.)    12.     The 
rules  on  the   subject  have    difEcred  in   the  different   States.     Se© 
Daniel  on  Negotiable  Instruments,  section  103.     In   Connecticut 
the  act  has  made  no  change  in  tbc  law;  for  the  rule  in  that  State 
has  been  that  a  non-negotiable  note  does  not  import  a  considera- 
tion,     r.ristol    r.  Warner,   19  Omn.   17.     A   certificate  of  deposit 
issued   l.y  a  banker  in   the  ordinary  form  of  such   instruments  is. 
in  substance  and  legal  effect,  u  neg(Uiable  promissory  note.     Cur- 


\j6  Till-:  XEGOTiAniJi:  instrlm j:\ts  law. 

rail  r.  Witter.  G8  Wis.  10;  Maxwell  v.  Agnew,  21  Fla.  154.  And 
so  are  i-oupong  payable  to  bearer.  Trustees  of  the  I.  I.  Fund  v. 
Lewis,  o4  Fla.  424.  In  an  action  on  a  note  payable  absolutely, 
evidence  is  not  admissible  to  prove  an  oral  aj^reenient  that  the 
maker  of  the  note  was  not  to  pay  it  unless  he  received  the  amount 
of  the  note  from  another  person.  Toi-pey  v.  Tebo,  184  Mass.  307. 
(h)  Statute  applied,  Sherman  v.  Goodwin  (Ariz.),  89  Pac.  Rep. 
517;  Geo.  Alexander  &  Co.  v.  Hazelrigg  (Ky.),  97  S.  W.  Rep. 
353.  Under  the  statute  a  maker  indorsing  the  note  incurs  a 
separate  and  distinct  liability  as  indorser,  and  may  be  sued  as 
such.  National  Exchange  Bank  v.  Lubrano  (R.  I.),  68  Atl.  Rep. 
944.  Under  the  former  statute  in  New  York  the  indorsement  of 
the  maker  was  not  necessary.  Irving  National  Bank  v.  Alley, 
79  N.  Y.  536. 

§321.  Check  defined. —  A  check  is  a  bill  of  exchange 
drawn  on  a  bank  (a),  payable  on  demand  (b).  Except  as 
herein  otherwise  provided,  the  provisions  of  this  act  ap- 
plicable to  a  bill  of  exchange  payable  on  demand  apply  to  a 
check  (c). 

(a)  Statute  applied.  Wedge  Mines  Co.  v.  Denver  Nat.  Bank,  19 
Colo.  App.  182;  Boswell  v.  Citizens'  Savings  Bank  (Ky.),  9G  S. 
W.  Rep.  797.  One  of  the  characteristics  which  distinguish  a  check 
from  a  bill  of  exchange  is  that  a  chock  is  always  drawn  on  a  bank 
or  banker.  Harris  v.  Clark,  3  N.  Y.  93,  115;  In  the  matter  of 
Brown,  2  Story's  Rep.  502.  See  also  Bull  v.  Bank  of  Kasson,  123 
U.  S.  105;  Rogers  v.  Durant,  140  U.  S.  298;  Espy  v.  Bank  of 
Cincinnati,  18  Wall.  620;  Merchants'  Bank  v.  State  Bank,  10 
Wall.  604;  Chapman  v.  White,  6  N.  Y.  412;  Harker  v.  Anderson, 
21  Wend.  373;  Murray  v.  Judah,  6  Cow.  484;  Cruger  v.  Arm- 
strong, 3  Johns.  5;  Ridgeley  Bank  v.  Fatten,  109  111.  484;  Har- 
rison V.  Nicollet  Nat.  Bank,  41  Minn.  489;  Northwestern  Coal 
Co.  V.  Bowman,  69  Iowa,  152 ;  Planters'  Bank  v.  Keese,  7  Ileisk. 
200;  Blair  v.  Wilson,  28  Gratt.  170;  Dodd  v.  Jette,  10  Oregon  31; 
Hopkinson  v.  Forster,  L.  R.  18  Eq.  74.  Under  the  statute  cash- 
ier's checks,  whether  certified  or  otherwise,  are  classed  with  bills 
of  exchange  payable  on  demand.  Singer  Mfg.  Co.  v.  Summers, 
143  N.  C.  103. 

(h)  There  has  been  some  conflict  in  the  decisions  as  to  whethei 
a  draft  upon  a  bank  not  payable  immediately  was  a  check  or  bill 


PROMISSORY   NOTES  AND   CHECKS.  I'J'J 

of  exchange.  The  latter  view  was  adopted  in  New  York.  Bowen 
V.  Newell,  8  N.  Y.  190;  13  N.  Y.  390.  To  the  same  effect  al30 
are  the  following  cases:  Ivory  v.  Bank  of  the  State,  3(3  Mo.  475; 
Harrison  v.  Nicollet  National  Bank,  41  Miiui.  488;  Georgia  Na- 
tional Bank  V.  Henderson,  46  Ga.  496;  Minturn  v.  Fisher,  4  Cal. 
36;  Morrison  v.  Bailey,  5  Ohio  St.  13.  Contra:  Champion  v.  Gor- 
don, 70  Pa.  St.  474;  Westminster  Bank  v.  Wheaton,  4  R.  I.  30, 
In  re  Brown,  2  Story,  502.  In  all  of  these  cases  the  pai'ticular 
question  presented  was  whether  the  instrument  was  entitled  to 
grace.  But  now  that  grace  has  been  abolished  the  distinction  is 
of  little,  if  any,  practical  importance. 

(c)  Bill  V.  Stewart,  156  Mass.  508;  Ames  v.  Meriam,  98  Mass. 
294.  Presentment  and  notice  of  dishonor  are  necessary  in  order 
that  the  holder  may  recover  of  the  drawer.  Ilerker  v.  Anderson, 
21  Wend.  372 ;  Dolph  v.  Eice,  18  Wis.  397.  But  unless  the  check 
answers  the  description  of  a  foreign  bill  protest  is  not  required. 
Wittich  V.  First  Nat.  Bank  of  Pensacola,  20  Fla.  843.  See  sec- 
tion 189. 

§  322.  Within  what  time  a  check  must  be  presented. — 
A  check  must  be  presented  for  payment  within  a  reasonable 
time  after  its  issue  or  the  drawer  {a)  will  be  discharged 
from  liability  thereon  to  the  extent  of  the  loss  caused  by 
the  delay  (b). 

(a)  It  will  be  noted  that  this  section  applies  only  to  the  drawer. 
The  rights  of  indorsers  are  governed  by  section  131.  See  note 
to  that  section.  But,  of  course,  where  the  drawer  is  discharged 
under  section  322,  the  indorser,  being  a  subsequent  party,  will 
be  discharged  under  the  provision  of  section  201,  "  that  a  person 
secondarily  liable  is  discharged  *  *  *  by  the  discharge  of  a 
prior  party." 

{h)  For  cases  applying  the  statute,  sec  Gordon  v.  Levine,  194 
Mass.  418,  421;  Aebi  v.  Bank  of  Evansvillo,  124  Wis.  73,  77; 
Citizens'  Bank  v.  First  Nat.  Bank  (Iowa),  113  N.  W.  Kcp-  •I'^l ; 
Cox  V.  Citizen's  State  Bank,  73  Kans.  789;  l^foskowitz  v.  Dcutsch 
(N.  Y.).  40  Misc.  003;  Singer  Manufacturing  Co.  v.  Suniincrs. 
143  N.  C.  103.  The  holder's  laches  in  presenting  a  check  for  pay- 
ment constitutes  no  defense  in  an  action  against  the  drawer  unless 
he  is  damaged  by  the  delay,  and  then  only  to  the  extent  of  bis  loss. 
12 


iX 


n 


\yS  THE    NEGOTlAliLE    liNSTKUMENTS    LAW. 

A  check  purports  to  be  luaile  upon  u  deposit  to  meet  it,  and  lire- 
supposes  funils  of  the  drawer  in  the  hands  oi  tlu'  (h'awee.  But  if 
ihc  drawer  has  no  such  fnmls  at  the  lime  of  dinwin;;'  his  cheek, 
or  subsequently  withdraws  them,  lie  eonimits  a  fraud  upon  tho 
payee,  and  can  sutfer  no  loss  or  daniaj-e  from  the  holder's  delay 
in  respect  to  presentment  or  notice.  In  such  case  he  is  liable  and 
cannot  insist  upon  a  formal  demand  or  notice  of  non-payment. 
First  iS^Uional  Bank  of  Portland  v.  Linn  County  National  Bank, 
30  Oregon  290;  Industrial  Bank  of  Chicago  v.  Bowes,  165  111.  70. 
For  instances  of  unreasonable  delay  see  Industrial  Trust,  Title  and 
Savings  Co.  v.  Weakley,  103  Ala.  458;  Gifford  v.  Ilardell,  88  Wis. 
538;  First  National  Bank  of  Wymore  v.  Miller,  43  Neb.  791; 
Comer  v.  Dufour,  95  Ga.  376;  Grange  v.  Eeigh,  93  Wis.  552; 
Western  Wheeled  Scraper  Co.  v.  Sadilek,  50  Neb.  105;  Gregg  v. 
Beane,  69  Vt.  22;  Holmes  v.  Eoe,  62  Mich.  199.  For  instances  of 
presentment  in  due  time,  see  Loux  v.  Fox,  171  Pa.  St.  68;  Willis 
V.  Finley,  173  Pa.  St.  28;  First  Nat.  Bank  v.  Buckhannon  Bank, 
80  Md.  475 ;  Lloyd  i'.  Osborne,  92  Wis.  93 ;  Bell  v.  Alexander,  21 
Graft.  1;  Purcell  v.  Ellemong,  22  Graft.  739.  But  while  ag  be- 
tween the  holder  and  drawer  of  a  check,  presentment  may  be  made 
at  any  time,  and  delay  in  presentment  does  not  discharge  the 
drawer,  unless  loss  has  resulted  to  him,  a  different  rule  obtains 
as  between  holder  and  indorser.  The  holder,  on  accepting  the 
check,  assumes  the  obligation  to  present  the  same  for  payment 
within  the  time  prescribed  by  law,  and  if  payment  is  refused  to 
give  notice  of  non-payment.  A  failure  to  do  this  discharges  the 
indorser  from  liability  as  such  irrespective  of  any  question  of 
loss  or  injury.  /  Carroll  v.  Swift,  128  N.  Y.  19.  It  is  not  clear 
whether  the  death  of  the  drawer  revokes  the  authority  of  the  bank 
to  pay  a  check.  There  is  no  decision  directly  in  point,  and  the 
view  of  the  text  writers  differ.  To  meet  the  difficulty,  the  original 
draft  of  the  Negotiable  Instruments  Law  submitted  to  the  com- 
missioners contained  a  provision  (which  was  taken  from  the  statute 
of  Massachusetts)  as  follows :  "  The  death  of  the  drawer  does  not 
operate  as  a  revocation  of  the  authority  to  pay  a  check,  if  the 
check  is  presented  for  payment  within  ten  days  from  the  date 
thereof."  But  it  was  thought  by  the  conference  of  commissioners 
that  this  would  be  objected  to  in  some  of  the  States  because  of 
the  effect  it  might  have  on  the  estates  of  decedents. 


PROMISSORY   NOTES  AND   CHECKS.  I79 

§323,  Certification  of  check;  effect  of. —  Where  a  check 
is  certified  by  the  bank  on  which  it  is  drawn  the  certifica- 
tion is  equivalent  to  an  acceptance  (a). 

(o)  See  Merchants'  Bank  v.  State  Bank,  10  Wall.  60-i;  Cooke  v. 
State  Xat.  Bank,  52  N.  Y.  96;  Farmers'  and  Mechanics'  Bank  r. 
Butchers'  and  Drovers'  Bank,  10  X.  Y.  125.  Section  270  applies 
to  an  acceptance  by  a  bank  as  well  as  by  any  other  drawee,  and 
hence  it  must  be  in  writing;  and  an  action  cannot  be  maintained 
against  the  bank  on  an  oral  promise  to  pay.  Van  Buskirk  v.  State 
Bank,  35  Colo.  142,  145.  The  certification  does  not  admit  the 
genuineness  of  the  indorser's  signature.  First  Xat.  Bank  v. 
Northwestern  Xat.  Bank,  152  111.  296.  As  to  the  liabilities  in- 
curred, see  section  112.  Where  a  check  delivered  without  the  in- 
dorsement of  the  payee  is  afterwards  certified  by  the  bank,  the 
holder  may  recover  of  the  bank,  though  he  is  unable  to  obtain 
the  indorsement  of  the  payee.  Mcuer  v.  Phenix  Xat.  Bank,  94 
App.  Div.  (X.  Y.)  331. 

§  324.  Effect  where  the  holder  of  check  procures  it  to  be 
certified. —  Where  the  holder  of  a  check  procures  it  to  be 
accepted  or  certified  the  drawer  and  all  indorsers  are  dis- 
charged from  liability  thereon  (a). 

(a)  See  Minot  v.  Russ,  156  Mass.  458;  Metropolitan  Bank  v. 
Jones.  137  111.  634;  Meridian  Xat.  Bank  v.  First  Xat.  Bank,  7  Iiid. 
App.  322i/First  Xat.  Bank  v.  Leach,  52  X.  Y.  350.  The  bank,  for 
its  own  protection,  usually  charges  up  the  check,  when  certified, 
to  its  depositor;  and,  as  the  drawer  cannot  thereafter  draw  against 
the  same  fund,  it  would  be  unjust  that  the  money  should  be  loft 
in  the  bank  at  his  risk  and  lie  roninin  liable  upon  the  extended 
check.  Bank  v.  Carter,  88  Tenn.  279.  But  where  the  chock  is 
certified  when  delivered  it  does  not  constitute  payment  any  more 
than  an  uncertified  check;  and  if  it  is  presented  promptly  and 
dishonored,  the  loss  must  fall  upon  tho  drawer.  Bom  v.  Fir?t 
Nat.  Bank,  123  Ind.  78;  Cincinnati  Oyster  &  Fish  Co.  r.  Nat. 
Lafayette  Bank.  51  Ohio  St.  106;  Bank  r.  Carter,  supra.  If  the 
certification  is  marie  at  the  reciuost  of  tho  indorsee,  it  operates  to 
release  the  indorser,  though  made  in  tho  absence  nf  funds  belong- 
ing to  the  drawer.     First  X^at.  Bank  r.  Currie,  147  Mich.  72. 


l8o  TllK    NEGOTIABLE    INSTRUMENTS    LAW. 

§  325.  When  check  operates  as  an  assignment.* — A  check 
of  itself  docs  not  oi)crate  as  aii  assignment  of  any  part  of 
the  fuiuls  to  the  credit  of  the  drawer  with  the  bank,  and 
the  bank  is  not  hable  to  the  holder,  unless  and  until  it  accepts 
or  certifies  the  check  (a). 

(a)  Statute  applied  in  Baltimore  &  Ohio  R.  R.  Co.  v.  First 
Nat.  Bank,  lOS  Va.  753;  Van  Buskirk  v.  State  Bank,  35  Colo. 
148;  Tibby  Bros.  Cdass  Co.  r.  Farmers  &  Mechanics'  Bank,  (Pa.) 
69  Atl.  Rep.  2S0.  Prior  to  the  statute  there  was  considerable  con- 
flict in  the  authorities.  The  rule  adopted  in  the  act  is  supported 
by  the  weif?ht  of  authority.  See  Bank  v.  Millard,  10  Wall.  152; 
Bank  v.  Schuyler,  120  IT.  S.  511;  Florence  Mills  Co.  v.  Brown,  124 
U.  S.  385;  First  Nat.  Bank  v.  Whitman,  94  U.  S.  343,  344;  St.  L. 
&  S.  F.  Ry.  Co.  V.  Johnston,  133  U.  S.  566;  Attorney-General  v. 
Continental  Life  Insurance  Co.,  71  N.  Y.  325,  330;  First  Nat. 
Bank  of  Union  Mills  v.  Clark,  134  N.  Y.  3G8;  O'Connor  v.  Me- 
chanics' Bank,  124  N.  Y.  324;  Maginn  v.  Dollar  Savings  Bank, 
131  Pa.  St.  362;  Saylor  v.  Bushong,  100  Pa.  St.  27;  Covert  v. 
Rhodes,  48  Ohio  St.  66 ;  Cincinnati  H.  &  D.  R.  R.  Co.  v.  Metro- 
politan Nat.  Bank,  54  Ohio  St.  60;  Pickle  v.  People's  Nat.  Bank, 
88  Tenn.  380;  Boetcher  v.  Colorado  Nat.  Bank,  15  Col.  16;  Hop- 
kinson  v.  Foster,  L.  R.,  18  Eq.  74.  Contra,  Fonner  v.  Smith,  31 
Neb.  107;  Munn  v.  Burch,  25  111.  35;  Bank  v.  Patton,  109  111. 
479,  485;  Doty  v.  Caldwell,  38  S.  W.  Rop.  1025;  Nat.  Bank  of 
America  v.  Nat.  Bank  of  111.,  164  111.  503.  But  while  the  mere 
making  and  delivery  of  a  check  in  the  ordinary  course  of  business 
does  not  operate  as  an  assignment  of  the  fund,  it  is  yet  competent 
for  the  parties  to  create  such  an  assignment  by  a  clear  agreement 
or  understanding,  oral  or  otherwise,  in  addition  to  the  giving  of 
the  check  that  such  shall  be  the  effect  of  the  transaction.  Fourth 
Street  National  Bank  v.  Yardley,  165  U.  S.  634;  Throop  Grain 
Cleaner  Co.  v.  Smith,  110  N.  Y.  83,  88. 

§  326.  Recovery  of  forged  check. —  No  bank  shall  be 
liable  to  a  depositor  for  the  payment  by  it  of  a  forsi^ed  or 

*Tlie  section-head  is  inaccurate,  since  the  section  expressly  declares 
that  a  check  is  not  an  assignment.  The  reading  should  be,  "Check 
not  an  assignment — JJ^hcn   bank  liable." 


PROMISSORY   XOTES  AND   CHECKS.  l8l 

raised  check,  unless  within  one  year  after  the  return  to  the 
depositor  of  the  voucher  of  such  payment,  such  depositor 
shall  notify  the  bank  that  the  check  so  paid  was  forged  or 
raised  (a). 

(a)  This  section  was  added  by  Laws  of  New  York,  1904,  eh.  287. 
It  does  not  seem  to  be  germane  to  the  Negotiable  Instruments 
Law,  and  would  more  properlj-  have  been  enacted  as  an  amend- 
ment to  the  Banking  Law.  If  the  statute  is  to  be  amended  by 
adding  provisions  outside  of  its  proper  scope,  it  will  soon  become 
such  a  piece  of  patchwork,  that  there  will  be  a  demand  for  its 
repeal. 


l82  THE   NEGOTIABLE  INSTRUMENTS   LAW. 


ARTICLE  XVIIL* 

Notes  Given  for  a  Patent  Rights  and  for  a  Specula- 
tive Consideration. 

Section  330.  Negotiable  instruments  given  for  patent  rights. 

331.  Negotiable  instruments  given  for  a  speculative 

consideration. 

332.  How  negotiable  bonds  are  made  non-negoti- 

able. 

§  330.  Negotiable  instruments  given  for  patent  rights. — 
A  promissory  note  or  other  negotiable  instrument,  the  con- 
sideration of  which  consists  wholly  or  partly  of  the  right 
to  make,  use  or  sell  any  invention  claimed  or  represented 
by  the  vendor  at  the  time  of  sale  to  be  patented,  must  con- 
tain the  words  "  given  for  a  patent  right  "  prominently  and 
legibly  written  or  printed  on  the  face  of  such  note  or  instru- 
ment above  the  signature  thereto ;  and  such  note  or  in- 
strument in  the  hands  of  any  purchaser  or  holder  is  subject 
to  the  same  defenses  as  in  the  hands  of  the  original  holder ; 
but  this  section  does  not  apply  to  a  negotiable  instrument 
given  solely  for  the  purchase  price  or  the  use  of  a  patented 
article  (a). 

(a)  Laws  N.  Y.  1877,  ch.  65,  section  1 ;  Laws  of  Pa.  1872,  60. 
This  section  is  not  in  contravention  of  the  Constitution  of  the 
United  States  and  the  Acts  of  Congress  which  secure  to  a  pat- 
entee for  a  limited  time  "  the  full  and  exclusive  right  and  liberty 
of  making,  using  and  vending  to  others  to  be  used  "  hig  invention 
or  discovery.  Herdie  v.  Rocssler,  109  N,  Y.  127;  Tod  1;.  Wick, 
36  Ohio  St.  370;  Haskell  v.  Jones,  86  Pa.  St.  173;  Shires  v.  Com- 
monwealth, 120  Pa.  St.  368;  Breckhill  v.  Randall,  102  Ind.  528; 

*  This  article  appears  onlj'  in  the  New  York  and  Ohio  acts. 


NOTES   GIVEN   FOR  A  PATENT  RIGHTS.  l8 


O 


New  I'.  Walker,  108  Ind.  365.  If  the  note  does  not  contain  the 
statement  required  by  this  section  it  is  unenforcible  between  the 
parties;  but,  if  negotiable  paper,  it  is  valid  in  the  hands  of  a 
holder  in  due  course.  Xew  v.  Walker,  lOS  Iiul.  365;  Knisa  v. 
Holbrook,  16  Ind.  App.  229;  Harmon  v.  Hagerty,  88  Teun.  "05. 

§  331.  Negotiable  instrument  for  a  speculative  considera- 
tion.—  If  tlie  consideration  of  a  promissory  note  or  other 
negotiable  instrument  consists  in  whole  or  in  part  of  the 
purchase  price  of  any  farm  product,  at  a  price  greater  by  at 
least  four  times  than  the  fair  market  value  of  the  same 
product  at  the  time,  in  the  locality,  or  of  the  membership 
and  rights  in  an  association,  company  or  combination  to 
produce  or  sell  any  farm  product  at  a  fictitious  rate,  or  of  a 
contract  or  bond  to  purchase  or  sell  any  farm  product  at  a 
price  greater  by  four  times  than  the  market  value  of  the 
same  product  at  the  time  in  the  locality,  the  words,  "  given 
for  a  speculative  consideration,"  or  other  words  clearly 
showing  the  nature  of  the  consideration,  must  be  prom- 
inently and  legibly  written  or  printed  on  the  face  of  such 
note  or  instrument  above  the  signature  thereof;  and  such 
note  or  instrument,  in  the  hands  of  any  purchaser  or  holder, 
is  subject  to  the  same  defenses  as  in  the  hands  of  the  orig- 
inal owner  or  holder  (a). 

(a)  Laws  N.  Y.  1874,  ch.  262,  section  1.  It  has  bocomc  quite 
the  custom  for  the  States  to  pass  laws  requiring  notes  given  in 
various  transactions  to  disclose  the  nature  of  the  consideration, 
and  one  State  legislature  has  gone  so  far  as  to  require  that  this 
part  of  the  contract  shall  be  written  in  red  ink.  In  construing 
one  of  these  statutes,  the  Supreme  Court  of  Wisconsin,  in  a  late 
case,  has  said:  "The  sales  of  lightning  rods,  patent  rights,  and 
stallions,  were  evidently  considered  by  the  Legislature  as  trans- 
actions, presenting  quite  siniilnr  opiiMituiiitics  and  iiKhn-enicnls 
for  overreaching  by  fniiidiili nt  methods,  and  so  it  was  detcrminrd 
that  they  might  well  be  conl rolled  by  tlie  same  restrictive  provi- 
sions; but  there  is  absohitely  no  indication  citlicr  in  the  law  itself 


184  Tiiii  iNegotiaull:  instruments  law. 

or  in  the  nature  of  things  that  the  restrict  ion  uikui  tlu'  free  sale 
of  stallions  or  lightning  rods  was  consideretl  in  any  way  depend- 
ent upon  or  eonipensated  by  the  restriction  upon  the  sale  of  patent 
rights.  It  is  not  elainied  that  sueh  a  restriction  upon  the  free- 
dom of  sales  of  stallions  is  unreasonable  or  unwarranted.  The 
records  of  this  court  in  recent  years  seem  to  show  that  such  trans- 
actions present  peculiarly  seductive  opportunities  for  misrepre- 
sentation and  fraud  even  surpassing  those  presented  by  the  tra- 
ditional horse  trade."  Quiggle  v.  Herman,  131  Wis.  379.  For 
other  eases  construing  similar  statutes,  see  note  to  section  9G. 

§  332.  How  negotiable  bonds  are  made  non-negotiable. — 
The  owner  or  holder  of  any  corporate  or  municipal  bond 
or  obligation  (except  such  as  are  designated  to  circulate 
as  money,  payable  to  bearer),  heretofore  or  hereafter  is- 
sued in  and  payable  in  this  State,  but  not  registered  in  pur- 
suance of  any  State  law,  may  make  such  bond  or  obligation, 
or  the  interest  coupon  accompanying  the  same,  non-ne- 
gotiable, by  subscribing  his  name  to  a  statement  indorsed 
thereon  that  such  bond,  obligation  or  cotipon  is  his  prop- 
erty ;  and  thereon  the  principal  sum  therein  mentioned  is  pay- 
able only  to  such  owner  or  holder,  or  his  legal  representa- 
tives or  assigns,  unless  such  bond,  obligation  or  coupon  be 
transferred  by  indorsement  in  blank,  or  payable  to  bearer, 
or  to  order,  with  the  addition  of  the  assignor's  place  of  resi- 
dence (a). 

(a)  Laws  N.  Y.  1871,  ch.  81 ;  Laws  N.  Y.  1873,  ch.  595. 


LAWS  repealed;  when  to  take  effect.         185 


ARTICLE  XIX. 

Laws  Repealed;  When  to  Take  Effect. 

Section  340.   Laws  repealed. 

341.  When  to  take  effect. 

§  340.  Laws  repealed. —  The  laws  or  parts  thereof  speci- 
fied in  the  schedule  hereto  annexed  are  hereby  repealed. 

§  341.  When  to  take  effect. — This  chapter  shall  take 
effect  on  the  first  day  of  October,  eighteen  hundred  and 
ninety-seven  (a). 

(a)  See  note  to  section  6. 

SCHEDULE  OF  LAWS  REPEALED.* 


Revised  Statutes. 

Sections.            Subject  Matter. 

R.  S.,  pt. 

II..  ch.  4, 

tit.  II.. 

.  .  .  .      All.  .  .  .      Bills  and  notes. 

Laws  of 

Chapter. 

Section. 

Subject  Matter. 

1835- • • 

141... 

All .  .  . 

Notice  of  protest;  how  given. 

1857... 

416. . . 

All .  .  . 

Commercial  ])apcr. 

1865... 

309... 

All... 

Protest  of  foreign  bills,  etc. 

1870... 

438... 

All... 

Negotiability  of  corporate 
bonds;  how  limited. 

187I. . . 

84... 

All... 

Negotiable  bonds;  how  made 
non-negotiable. 

1873 •■• 

595- •• 

All... 

Negotiable  bonds;  how  made 
negotiable. 

1877... 

65... 

1.3- •• 

Negotiable  instruments  given 
ff)r  patent  rights. 

*This  schedule  comprises  only  the  New  York  statutes. 


l86  THE   NEGOTIABLE   INSTRUMENTS   LAW. 

Laws  of  Chapter.         Section.  Subject  Matter. 

1887.  .  .      461 .  .  .      All.  .  .      Effect  of  holidays  upon  pay- 

ment of  commercial  paper. 

1888.  .  .      229.  .  .      All. . .      One  hundredth  anniversary  of 

the  inauguration  of  George 
Washington. 

1891 . .  .      262.  .  .         I .  .  .      Negotiable   instruments  given 

for  a  speculative  considera- 
tion. 

1894. . .      607.  . .     All.  .  .      Days  of  grace  abolished. 


PENAL   CODE   AMENDMENT.  iS/ 


LAWS  OF  NEW  YORK,  1897,  CHAPTER  613. 

AN  ACT  to  amend  the  Penal  Code,  relative  to  violation  of 
the  Negotiable  Instruments  Law. 

The  People  of  the  State  of  Nen'  York,  represented  in 
Senate  and  Assembly,  do  enact  as  follozi's: 

Section   i.  The  penal  code  is  hereby  amended  by  insert- 
ing at  the  end  of  title  twelve  the  following  new  sections : 

§  384-m.  Notes  given  for  patent  rights. —  A  person  who 
takes,  sells  or  transfers  a  promissory  note  or  other  nego- 
tiable instrument,  knowing  the  consideration  of  such  note  or 
instrument  to  consist  in  whole  or  in  part  of  the  right  to 
make,  use  or  sell  any  patent  invention  or  inventions,  or  any 
invention  claimed  or  represented  to  be  patented,  without 
having  the  words  "  given  for  a  patent  right  "  written  or 
printed  legibly  and  prominently  on  the  face  of  such  note  or 
instrument  above  the  signature  thereto,  is  guilty  of  a  mis- 
demeanor. 

§  384-n.  Notes  given  for  a  speculative  consideration.— 
A  person  who  takes,  sells  or  transfers  a  promissory  note  or 
other  negotiable  instrument,  knowing  the  consideration  of 
such  note  or  instrument  to  consist  in  whole  or  in  part  of 
the  purchase  price  of  any  farm  product  at  a  price  greater 
by  four  or  more  times  than  the  fair  market  value  of  the 
same  product  at  the  time  in  the  locality,  or  in  which  tlic 
consideration  shall  be  in  whole  or  in  part  membership  of 
and  rights  in  an  association,  company  or  combination  to 
produce  or  sell  any  farm  i.mdtict  at  a  fictitious  rate,  .>r  of 
a  contract  or  bond  to  purchase  or  sell  any   farm  product 
at  such  rate,  without  having  the  words  "  given  for  a  specu- 
lative consideration,"  or  other  words  clearly  showing  the 
nature  of  the  consideration  prominently  and  legibly  written 


l88  NEGOTIABLE   INSTRUMENTS   LAW. 

or  printed  on  the  face  of  such  note  or  instrument  above  the 
signature  thereof  is  guiUy  of  a  misdemeanor. 

§  -'.  Section  two  oi  cliapter  sixty-five  of  the  laws  of 
eighteen  hundred  and  seventy-seven,  and  section  two  of 
chapter  twc^  hundred  and  sixty-two  of  the  laws  of  eighteen 
hundred  and  ninety-one,  are  hereby  repealed. 

§  3.  This  act  shall  take  effect  the  first  day  of  October, 
eighteen  hundred  and  ninety-seven. 


INDEX. 

(The  references  are  to  pages.) 


ACCEPTANCE,  meaning  of  term,  3. 
what  it  is,  152,   153. 
must  be  in  writing,  152. 
must  be  signed,  152. 

holder  may  require  it  to  be  on  face  of  bill,  152. 
must  be  for  payment  in  money,  152. 
is   new   contract,    152. 
form  of,  152. 

signature  of  drawee  sufficient,  152. 
by   separate   instrument,   153. 
when  acceptance  on  separate  instrument  binds  acceptor, 

153. 
promise   to   accept   deemed   acceptance,   154. 
by  telegraph,  154. 

by  what  law  promise  to  accept  governed,  154. 
at  common  law  oral  promise  was  sufficient,  154. 
acceptance  by  agent,  154. 

time  allowed  drawee  in  which  to  accept,   155. 
when  retention  of  bill  amounts  to  acceptance,  155. 
where  bill  incomplete,  156. 
where  bill  overduo,  156. 
after  bill  dishonored,  156. 
date  of  acceptance,  156. 
kinds  of  acceptance,  156. 

what  constitutes  general  acceptance,  156,  157. 
qualified  acceptance,  157. 
conditional,  157. 
local,  ir^7. 
partial,  157. 

agf-nt  cannot  take  qualified  acceptance,  158. 
duty  of  holder  where  bill  dishonored  by  non-acceptance, 

162. 
when    bill   dishonored    by   non-nccpptanco,    162. 
what  })ills  must  be  protested  for  noii-acecptjiiiee.  1(!3,  164. 
of  bill-;  in  set,  174. 


190  INDEX. 

(Tlio  n'fi'ivnc'os   are   to   piigos.) 

ACCEPTANCE  FOR  HON  OK,  whoi  bill  may  be  accepted  for 

honor,    108. 
how  luade,  IGi). 
for  part  of  sum,  109. 
for    clitferent    parties,    169. 
when  acceptance  does  not  state  for  whose  honor  made, 

109. 
agreement  of  acceptor  for  honor,  169. 
liability  of  acceptor  for  honor,  169. 
maturity  of  bill  payable  after  sight  accepted  for  honor, 

169. 
how  presentment  for  payment  made  to  acceptor  for  honor, 

170. 
dishonor  of  bill  accepted  for  honor,  170. 
when    delay    in    making   presentment   excused,    170. 
ACCEPTOK,    by    accepting    admits    existence    of    drawer,    81. 
admits  genuineness  of  drawer's  signature,   81. 
admits   drawer's   capacity   to   draw,    81. 
admits   authority   to   draw,    81. 
admits  capacity  of  corporation  to  draw  bill,  81. 
admits  capacity  of  married  woman,  82. 
admits  capacity  of  infant,  82. 
may  not  show  that  drawer  is  a  lunatic,  83, 
not  presumed  to  know  signature  of  indorser,  82. 
not  presumed  to  know  handwriting  in  body  of  bill,  82. 
liability  of  acceptor,  81-83. 

demand  for  payment  not  necessary  in  order  to  charge,  94. 
when  acceptor  insolvent  bill  may  be  protested  for  better 

security,    107. 
ACCEPTOR  FOR  IIOXOR,  liability  of  acceptor  for  honor,  169. 

agreement    of    acceptor    for    honor,    169. 
ACCOMMODATION   PAPER,    notes   mutually   exchanged    are 

not,  45. 
payment  of  by  party  accommodated  discharges  paper,  136. 
ACCOMMODATION  PARTIES,  liability  of,  44. 
married  women  as,  45. 
right  to   retract,  45. 
right  to   impose  conditions,  47. 
discharge  of  by  diversion  of  instrument,  47. 
corporations  cannot  become,  46. 
rights  of  on  payment  of  instrument,  142. 


INDEX.  191 

(The  references  are  to  pages.) 
ACTION,  meaning  of,  3. 

restrictive    indorsement    confers    right   to    bring,    53. 
AGENT,  signature  by,  32-34. 
authority  of,  32. 
how  authority  shown,  32. 
liability  of  person  signing  ag  agent,  32,  93. 
delay  of  in  making  presentment,  100. 
may  give  notice  of  dishonor,  116,  117. 
notice  of  dishonor  may  be  given   to,  121. 
cannot  take  qualified  acceptance,  158. 
duty  of  to  present  bill  for  acceptance,  159. 
holder  may  require  production  of  his  authority  to  accept, 
161. 
ALTEEATIOX,  effect  of,  145-147. 

holder  in  due  course  may  enforce  instrument  according 

to   original   tenor,   145. 
what  constitutes  a  material  alteration,  147,  148. 
burden  of  explaining,  145,  146. 
pleading  and  evidence,  147. 
as  to  date,  147. 
as  to  sum  payable,  147. 
as  to  time  of  payment,   147. 
as  to  place  of  payment,  147. 
as  to  number   of  parties,   147. 
as  to  relation  of  parties,  14Y. 
as  to  modiuin    of   payment,   147. 
addition  of  place  of  payment,  147. 
other  changes,  147,  148. 
pleading  in  case  of,  147. 
AMBIGUOUS    INSTRUMENT,   construction   of,   28-31. 
ANTECEDENT  DEBT,  constitutes  value,  39,  41,  42. 
ANTEDATED,  instrument  not  invalid  because,  22. 
ASSIGNMENT,  bill  is  not,  140. 

wben  bill  may  amount  to,  149,  150. 
check  is  not,  180. 
when  cbec-k  may  amount  to,  ISO. 
ASSUMED   NAME,   persons   signing   in,   32. 
ATTORNEY'S  FEE,  provision  for,  9,  10. 


lOJ  IXDKX. 

(Tlio  roforoncos  arc   lo   pages.) 
BANK,  moaning  of,  3. 

whoa  bank  discounting  paper  holder  for  value,  39,  65,  CC. 

instrument  payable  at  equivalent  to  order  to  pay,  111. 

presentment  of   instrument   payable  at,  103,  104. 

hours  for  making   i)rescntment,   103,   104. 

where  bank  is  closed,  104. 

what    will   be   considered   a   bank,   104. 

when  suit  may  be  commenced  upon  paper  payable  at,  104. 

duty  of  to  present  bill  for  acceptance,  159,   IGO. 

liability  of  on   certified  check,  179. 

not  liable  on  check  unless  it  accepts  or  certifies  the  same, 
180. 
BANK  NOTES,  note  payable  in,  17,  18. 
BEAKER,  meaning  of  term,  4. 

instrument  must  be  payable  to  or  order,  8. 

when   instrument  payable  to,  20-22. 

instrument    payable    to    person   named    or    bearer,    20. 

instrument   payable   to  fictitious  person,   20. 

when  payee  not  name  of  any  person,  20. 

when  indorsed  in  blank,  20. 

instrument   payable   to   cash   is   payable   to,   22. 

instrument    payable   to    sundries    is    payable   to,    22. 

instrument  payable  to  estate,  21. 

indorsement  of  instrument  payable  to,  55,  92. 

former  rule  in  some  States,  92. 
BILL,  meaning  of  term,  4. 
BILLS  IN  A  SET  constitute  one  bill,  173. 

rights  of  holder  where  different  parts  are  negotiated,  173. 

liability  of  indorser,  173. 

acceptance  of,  174. 

payment    of,    174. 

effect  of  discharging  one  of  a  set,  174. 
BILL  OF  EXCHANGE,  term  "  bill "  means  bill  of  exchange,  4. 

ambiguous  instrument  may  be  considered  either  bill  oi 
note,    29. 

definition  of,  149. 

is  not  an  assignment,  149. 

where  drawer  and  drawee  are  same  person,   150. 

may  be  addressed  to  two  or  more  drawees,  150. 

but  not  to  two  or  more  in  the  alternative,  150. 


INDEX.  193 

(The  references  are  to   pages.) 

BILL  OF  YXCRA^GE  — Continued. 

inland  bill,  what  constitutes,  150. 

foreign    bill,    what   constitutes,    150, 

when  bill  may  be  treated  as  promissorj'  note,  150. 

when  bill  may  amount  to  an  assignment,  149,  150. 

referee  in  case  of  need,  151. 
BLANKS,  when  may  be  filled,  23-26. 

when  improperly  filled,  23-26. 

presumption  as  to  authority,  23-26. 

statute  does  not  apply  to  payee,  24. 

no  authority  to  fill  where  instrument  has  not  been  deliv- 
ered, 24. 
BOHEMIAN   OATS   NOTES,   provisions   as  to,   18. 
BONDS,  how  made  non-negotiable,  184. 

liability  of  person  negotiating,  87,  88. 
BROKER,  liability  of,  93. 

BURDEN  OF  PROOF,  where  title  of  prior  party  was  defective, 
77-79. 

CANCELLATION  discharges  instrument,  136. 

unintentional    cancellation,    145. 

effect  of,  145. 

burden  of  proof,  145. 
CAPACITY,  acceptance  admits  capacity  of  drawer  to  draw  bill, 
81,  82. 

warranty   of   where   negotiation    by    delivery,    87. 

warranty  of  by  general  indorser,  89. 
"  CASn,"  instrument  payable  to,  22. 
CASHIER,  instrument  payable  to,  56. 

not  disqualified  to  act  as  notary,  1G6. 

may  protest  his  own  note,  166. 
CERTIFICATION,  effect  of,  170. 

equivalent  to  acceptance,  170. 

where  holder  has  check  certified,  179. 

where    drawer    has    check    certified,    179. 
CHECK   defined,   176. 

difference  between  check  iind  lilll.  176,  177. 

presentment  and  notice  of  dislidimr  iicce!?snry.  177. 

within   what   time  imist   Ix-  presented,  177.  178. 

effect  of  delay.  177,  178. 


194  INDEX. 

(Tho  roferoni'os  arc  to  pages.) 
CB.ECK  — Continued. 

certification  of,  177,  179. 

is  not  assignment,  180. 

airroonieiit  for  assifiiunent  by,  180. 
COLLATERAL    8KCUKITILS,,    provision    for    sale    of,    15. 

must  be  tendered  witb   instrument,  103. 

holder  receivins;  collaterals  not  required  to  proceed  upon 
before  suinj?  indorser,   109. 
"COLLECTION,"    indorsement   for,   52. 

effect  of,  52. 

liability   of   indoracr,   IIG,   117. 
CONDITIONAL  INDORSEMENT,  party  paying  may  disregard 
condition,  54,  55. 

indorsee  holds  subjects  to   rights   of  indorser,  54,  55. 
CONFESSION    OF   JUDGMENT,   provision   for,   15,   16. 
CONFLICT  OF  LAWS,  by  what  laws  demand  of  payment  de- 
termined, 96. 

by  what  law  validity  of  promise  to  accept  determined, 
154. 

bill  payable  in  foreign  country,  96. 
CONSIDERATION,  presumption  as  to,  38. 

what    constitutes,    39. 

antecedent    debt,    is,    39-42. 

absence  or  failure  of  is  defense,  43. 

partial  failure  of  is  defense  pro  tanio,  43. 

accommodation   parties,   44. 

presumption   a3  to    in   case   of   non-negotiable   note,   32, 
175. 

instrument  given   for   speculative  consideration,   331. 

requirement   that   consideration    be   stated,    74,    183. 
CONTINGENCY,    instrument    payable    on    is    not    negotiable, 

13,  14. 
CORPORATION   included   in   word   "person,"   4. 

indorsement  by,  33. 

delivery  of  paper  of  by  officer  for  personal  debt,  71. 

acceptor  admits  capacity  of  to  draw,  82. 

may   not   become    accommodation    party,    46. 
CTJRRENT    MONEY,    designation    of   particular   kind    of,    16, 
17,  18. 


INDEX.  195 

(The  references  are  to  pages.) 
DATE,  absence  of  does  not  affect  validity  of  instrument,  16. 
presumption  as  to  date,  22,  29. 
evidence  to  show  mistake  as  to  date,  22. 
instrument  may   be  ante-dated,  22. 
may  be  post-dated,   22. 
Avhen  date  may  be  inserted,  23. 
insertion  of  wrong  date,  23. 
alteration  of  date,  14Y. 
from  what   date  law  takes  effect,  185. 
DAYS  OF  GKACE,  abolished,  110. 

rule  not  uniform.  111. 
DEFENSES,  when   instrument  subject  to,  71-77. 
nature  of,  71-76. 
who  liable  to,  71-77. 
DELAY,  when  delay  in  presenting  for  payment  is  excused,  106, 
107. 
in  giving  notice  of  dishonor,  133. 
in  presenting  check.  99,  177,  178. 
DELIVERY,  meaning  of  term,  4. 

of  incomplete  instrument,  26. 

contract  revocable   until   delivery,   27. 

presumption  as  to  delivery,  27,  28. 

necessary  to  convey  title,  48,  49. 

evidence  to  show  terms  of  delivery,  40. 

is    negotiation    of   instrument    payable   to   bearer.   4S. 

of  bill  or  check  implies  representation  that  drawee  is  in 

funds,  82. 
warranty  where  negotiation  by  delivery,  87-89. 
DEMAND,  IXSTKT':MENT  PAYABLE   ON,   instrument  must 
be    payable    on    demand    or    at    determinable    future 
time,   8. 
instrument  expressed  to  be  payable  on,  18. 
payable   at   sight,   18. 
payable  on   presentation,  18. 
when  no  time  expressed,  18. 

instrument  issued.  i(<..  when  overdue  is  payable  on  de- 
mand, 18. 
distinction  between  and  instrunicnts  payable  on  demand 
and  at  sight,  18. 


196  INDEX. 

(Tho   rof(>ronc(>s  arc  to   pages.) 

DE MA.N  D.   1 N  ST  K  U  M  K  N  T   1 » A  Y  A  B  L  K  ON  —  Con  tinned. 

when   words,   "on    demand "    may   be   added,    19. 

legal   intendment    cannot   be   ehanged   by   patrol,    19. 

instrument  payable  on  deiiKuid   negotiated  an   unreason- 
able time  after  its  issue,  OG. 

overdue  bill  is   payable  on,   18,   97. 

when  instrument  payable  on  demand  must  be  presented, 
96-100. 
DETERMINABLE  FUTURE  TIME,  instrument  must  be  pay- 
able   at,    8. 

what  is,  13. 

fixed  period  after  date  or  sight  is,  13. 

on  or  before  fixed  time  is,  13. 

on  or  after  event  certain  to  happen  is,  13. 
DISCHARGE    OF    INSTRUMENT    by   payment   on    behalf   of 
principal   debtor,    136. 

where   principal   debtor   becomes   holder   after   maturity, 
136. 

by  cancellation,  136. 

by  other  act,  136. 

by  payment  by  party  accommodated,  136. 

of  one  part  of  a  bill  drawn  in  a  set,  174. 
DISCHARGE  OF  PARTY  SECONDARILY  LIABLE  by  dis- 
charge of  instrument,  138. 

by  cancellation   of  signature,   138. 

by  discharge  of  prior  party,  138. 

by  tender  by  prior  party,  138. 

by  release  of   principal   debtor,   138-140. 

reservation  of  rights  against  surety,  138,  140. 

extension  of  time,  when  will  discharge,   138-141. 

mere  indulgence  will  not  discharge,  140. 

where  holder  allows  statute  of  limitations  to  run  against 
principal   debtor,   139. 

accommodation     maker     not     discharged     by     extension 
granted   indorser,    140-142. 
DISCOUNTING  PAPER,  when  bank  holder  for  value,  39,  65, 

66. 
DRAWEE  must  be  named  or  indicated  in  instrument,  8. 

not  liable  until  acceptance,  149. 

bill  may  be  addresrsed  to  two  or  more,  150. 


INDEX.  197 

(The  references  are  to  pages.) 
DRAWEE  —  Contimied. 

but  not  to  two  or  more  in  the  alternative,  150. 

time  allowed  in  which  to  accept,  155. 

retaining  or  destroying  bill  is  liable  as  acceptor,  155. 
DRAWEE,  instrument  payable  to  order  of,  19. 

engagement  of  by  drawing  bill,  81. 

admission  of,  81. 

liability  of,  81. 

may  negative  liability,  81. 

existence  of  admitted  by  acceptor,  81. 

when  presentment  not  necessary  to  charge,  106. 

right  of  recourse  to,  109. 

notice  of  dishonor  must  be  given  to,  115. 

when  notice  of  dishonor  need  not  be  given  to,  133. 

when  released  by  failure  to  present  bill  for  acceptance, 
160. 

liability  of  where  bill  dishonored  by  non-acceptance,  162. 

when  protest  necessary  in  order  to  charge,  163. 

of  check  discharged  if  holder  has  check  certified,  179. 
DUE  DILIGENCE,  when  question  of  law,  107,  133. 

when  question  of  fact,  107. 

what  will  constitute,  107,  108,  132,  133,  177,  178. 
DURESS,  instrument  or  signature  obtained  by,  67. 

EVIDENCE,  admissibility  of  evidence  to  show  agreement  among 

indorsers,  85-87,  92. 
EXCPTANOE,  provision  for,  10. 
EXHIBITION   OF  INSTRUMENT,  when  necessary,  103,  112. 

when  excused,  103.- 

paymcnt  without,  112,  113. 

FICTITTOT^S   PERRON,  when    instrument  payable  to   onler  of 
is  payable  to  bearer,  20,  80. 
whether  instrument  payable  to  order  of  estate  is,  21. 
paper  issued  to  one  fraudulently  imi)ersonating  another, 

36,  37 
presf-ntment  for  payment   not  required   wliere   drawee  is 
fictitious   person,   107. 
FKiURES,    where    there    is    a    discrepancy    between    words    mikI 
figures,  26. 


198  INDEX. 

(The   rpferonces  nri>   to   pages.) 
FISCWL  OFFTCEK.  instrumont  payable  to,  46. 
FOKiaCJiN   BILL,  what  is.  11(!. 
FORGED   SIGNATURE  confers  no  li-ht,  30. 

when  party  estopped  to  allefj^e  forgery,  30. 
P'RAUl),   instrument  or  signature  obtained  by,  53. 

GA SIBLING  DEBT,   note  given  for,  72-74. 
GENUINENESS,  warranty  of  where  negotiation  by  delivery,  87. 

warranty  of  where  negotiation  by  qualified  indorsement, 
87. 

when  warranty  of  not  implied,  87. 

warranty  of  by  general  indorser,  87. 

acceptor  admits  signature  of  drawer,  81,  82. 

acceptance  does  not  admit  signature  of  indorser,  82. 

nor  handwriting  in  body  of  instrument,  82. 
GOLD  COIN,  note  payable  in,  17. 
'•^  GUARANTOR,  person  may  become  such,  83. 

when  proceedings  against  principal  are  necessary,  115. 

not  entitled  to  notice  of  dishonor,  115. 
GUARANTY,  conditional  guaranty,  110. 

HOLDER,  meaning  of  term,  4. 

may  sue  in  his  own  name,  62. 

may  receive  payment,  62,  63. 

rights  of  where  bill  dishonored  by  non-acceptance,  162. 

duty  of  where  bill  not  accepted,  162. 

refusal  to  receive  payment  for  honor,  172. 

by    having    check    certified    discharges    drawer    and    in- 
dorsers,  179. 

of  checks  cannot  recover  of  bank  on  check  until  it  ac- 
cepts or  certifies  the  same,  180. 
HOLDER  FOR  VALUE,  what  constitutes,  39. 

person  having  lien  is,  41. 

when  bank  discounting  note  is,  39,  65,  66. 
HOLDER  IN  DUE  COURSE,  what  constitutes,  63-67. 

who  is  not,  63-67. 

in  case  of  instrument  payable  on  demand,  66,  67. 

where  full  amount  has  not  been  paid  before  notice,  67. 

what  constitutes  notice  of  equities,  68-71. 

holds   insrtrument   free  from  equities,   71-75. 


INDEX.  199 

(The  references  are  to  pages.) 
HOLDER  IN  DUE  COURSE  —  Continued. 

may  recover  full  face  value,  71,  7-i,  75. 

rights   of   person  claiming  under  holder  in  due  course, 

75-77. 
when  burden  on  holder  to  prove  that  he  took  instrument 
in  due  course,  77-79. 
HOLDER  OF  OFFICE,  instrument  payable  to  order  of,  19,  20. 
HOLIDAY,  when  day  for  doing  act  falls  on,  5. 
instrument  falling  due  on,  110,  111. 

INCOMPLETE  INSTRUMENT,  filling  blanks,  23-26. 
not  delivered,  26. 
acceptance  of,  156. 
INDORSER,  where  character  not  clear  signer  is  presumed  to  be 
an  indorser,  29-31. 
when  person  deemed  such,  83. 
irregular  indorser,  83-87. 
admits   capacity  of  prior  party,  91. 
parol  evidence  to  vary  liability  of,  85-87,  91-93. 
liability  of  where  paper  negotiable  by  delivery,  92. 
presentment  necessary  in  order  to  charge,  130,  177. 
order  in  which  indorsers  liable,  92. 
when  presentment  for  payment  not  necessary  to  charge, 

106. 
right  of  recourse  to,  109.  110. 
not  a  mere  surety  after  dishonor,  109,  110. 
liability  where  collaterals  have  been  received,  110. 
holder  not  required  to  proceed  on  collaterals  in  order  to 

charge  indorsers,  110. 
notice  of  dishonor  must  be  given  to,  115. 
when  notice  of  dishonor  need  not  be  given  to,  134. 
what  will  discharge,  97-100,  138-142. 
payment  by   does  not   discharge   makcM-,   142-144. 
where  released  by  failure  to  present  bill  for  M<v,.ptaTico. 

160. 
liability  of  whore  bill  dishonored  by  noTi-acccptance.  162. 
in  what  eases  protest  necessary  in   ord.'r  to  chnrg.-.   163. 
liability  of  where  he   indorse.'*  .lifTcnul    pin-ts  ..f   a   set, 

173.  174. 

,.f  .lick  discharged  by  delay  to  present,  177,  178. 


JOO  INDEX. 

(TIio  roforiMK'cs  nro   to   pages.) 
INDOKSEMEXT,  ineaiiiiiK  of  term,  4. 

instninu'iit   indorsed  in  blank  payable  to  bearer,  21. 

by  infant,  35. 

by  corporation,  35. 

where  written,  40. 

required  for  negotiation  of  instrument  payable  to  order, 

48,  49. 
must  be  completed  by  delivery,  48,  49. 
must  be  on  instrument,  49,  50. 
or  on  an  allonge,  49,  50. 
signature  alone  sufficient,  50. 
must  be  of  entire  instrument,  50. 
kinds  of,  51. 
special   indorsement,  51. 
indorsement  in  blank,  51. 
how  special  indorsement  converted  to  blank  indorsement, 

51. 
when  restrictive,   51,  52. 
restrictive   indorsement   prohibiting   further   negotiation, 

51,  52. 
restrictive  indorsement  constituting  indorsee  mere  agent, 

51,  52. 
restrictive  indorsement  vesting  title  in  trust,  52. 
effect  of  indorsement  "  for  collection,"  52. 
restrictive    indorsement    authorizes    indorsee    to    receive 

pajncnent,   53. 
restrictive    indorsement     authorizes    indorsee    to     bring 

action,  53. 
restrictive   indorsement   authorizes    indorsee   to   transfer 

his  rights  as  indorsee,  53. 
effect  of  qualiiicd  indorsement,  53,  54. 
qualified   indorsement  does   not   impair   negotiable  char- 
acter of  the  instrument,  54. 
qualified  indorsement  does  not  throw  suspicion  on  paper, 

54. 
of  instrument  payable  to  bearer,  55. 
where  instrument  payable  to  two  or  more,  56. 
by  cashier,  56. 
by  fiscal  officer,  56. 
where  name  misspelled,  57. 


INDEX.  201 

(The  references  are  to  pages.) 
INDORSEMENT  —  Continued. 

where  payee  or  indorsee  wrongly  designated,  57. 

in  representative  capacity,  57. 

presumption  as  to  place  of,  58. 

presumption  as  to  time  of,  57,  58. 

striking  out  indorsement,  59. 

effect  of  striking  out  indorsement,  59. 

when  may  be  done,  59,  60. 

transfer  without  indorsement,  60. 

rights  of  transferee,  60,  61. 

prior  equities,  60,  61. 

warranty    where    negotiation    by    qualified    indorsement, 
87-89. 

warranty  of  title  in  case  of  qualified  indorsement,  87-89. 

warranty  by  general  indorsement,  89-91. 
INFANT,  indorsement  by,  35. 
INLAND  BILL,  what  is,  150. 

INSOLVENCY,  does  not  excuse  presentment,  107. 
INSTALL:\rENTS,   instruments  payable  in,  9. 
INSTRUMENT,  meaning  of  term,  4. 

INTEREST,  where  instrument  does  not  specify  date  from  which 
interest  to  run,  29. 

does  not  make  sum  uncertain,  9. 
ISSUE,  meaning  of  term,  4. 

JOINT  DEBTORS,  presentment  to,  105. 

JOINT  PARTIES,  two  or  more  persons  signing  "I  promise  to 

pay,"  29. 
JUDGMENT  NOTES,  15,  16. 

LAW  MERCHANT,  when  governs,  6. 

LIABILITY,  no  OIK"  liable  whose  signature  not  on  instrument,  32. 

of  pers?on  signing  as  agent,  32. 

of  maker,  80. 

of  drawer,  81. 

of  acceptor,  81-83. 

of  irregular  indorser,  83-87. 

where  paper  negotiated  liv  delivery  only,  87-80. 

where  paper  negotiated   by  (iniilificd   iiidursemcnt,  87-89. 

of  general  indorser,  S9-91. 


202  INDEX. 

(The  references  are  to  pnges.) 
LIABILITY-  Continued. 

ot  indorsei   where  paper  nerrotiable  by  delivery,  92. 

order  in  wliich  indorsers  liable,  92. 

of  asent  or  broker,  93. 
LIEN,  person  haviiif''  is  holder  for  value,  41-43. 
LIGHTNING  RODS,  notes  Riven  for,  74. 
LUNATIC,  acceptor  cannot  show  drawer  a  lunatic,  83. 

MAIL,   miscarriage   in,   does   not   invalidate  notice   of   dishonor, 

125-126 
MAKER,  note  payable  after  death   of,  14. 

instrument  payable  to  order  of,  19,  175. 
liability  of,  80. 
admission  of,  80. 

demand  of  payment  not  necessary  to  charge,  94,  95. 
liability  to  holder  where  part  payment  made  by  indorser, 
137. 
MARRIED  WOMAN,  acceptor  admits  capacity  of  to  draw  bill, 
82. 
liability  of  on  commercial  paper,  58,  70. 
MATURITY,  option  to  pay  before,  13,  14. 
time  of,  84. 

NEGOTIABLE  INSTRUMENTS,  law  is  confined  to,  2. 

"  instrument "  means  negotiable  instrument,  4. 

must  contain  unconditional  promise,  8. 

must  be  for  payment  of  sum  certain,  8. 

must  be  for  payment  of  money  only,  8. 

must  be  in  writing,  8. 

must  be  signed  by  maker  or  drawer,  8. 

must  be  payable  on  demand  or  at  determinable  future 
time,  8. 

must  be  payable  to  order  or  bearer,  8. 

statement  of  transaction  does  not  affect  negotiable  char- 
acter, 10. 

indication  of  particular  fund  does  not  Tender  non- 
negotiable,  10. 

order  to  pay  out  of  particular  fund  not  negotiable,  11. 

instrument  payable  on  contingoncy  not  negotiable,  13. 

provision  foi  sale  of  collateral,  15. 


INDEX.  20 


J 


(The  references  are  to   pages.) 

NEGOTIABLE  INSTRUMENTS  —  Continued. 

pEovision  for  confession  of  judgment,  15. 

waiver  of  benefits  of  law,  15. 

option  to  require  something  in  lieu  of  payment  in  money, 
15,  16. 

instrument  payable  when  certain  person  shall  become  of 
age,  11. 

omissions  not  affecting,  16-18. 

not  dated,  16. 

not  specifying  value  given,  16. 

not  specifying  place  where  drawn,  16. 

not  specifying  place  where  payable,  16. 

bearing  seal,  16. 

provisions  as  to  collaterals,  15. 

designation  of  particular  kind  of  current  money,  16-18. 

instrument  continues  negotiable  until  discharged  or  re- 
strictively  indorsed,  59. 
NEGOTIABLE  INSTRUMENTS  LAW,  short  title,  2. 

when  to  take  effect,  5,  18. 

to  what  instruments  it  applies,  2. 
NEGOTIATION  of  posrt-dated  instruments,  22,  23. 

rules  governing,  48-61. 

what  constitutes  negotiation,  48,  49. 

of  instrument  payable  to  bearer,  48. 

of  instrument  payable  to  order,  48,   49. 

party    secondarily   liable   paying   instrument   may   again 
negotiate  it,  142-144. 

when   drawer   and   indorsers  released   by   delay   in   nego- 
tiating bill,  160. 

bill  must  be  negotiated  within  reasonable  time,  96,  98- 
100.  160. 

of  bills  in  set?.  173. 
NEW  YORK  STATE  BILLS,  note  payable  in,  IS. 
NOTARY  PUBLIC,  may  make  protest,  166. 

not  disqualified  because  officer  of  bank.  166. 

presentment   must  be  by   nf)tary    in   person.    166. 

certificate  of  cs  evidence,  164,  165. 
NOTE,  meaning  of  term,  4. 


204  INDEX. 

(The  roforrnocs  arc   to   ungos.) 
NOTICE   OF   DISHONOR,   where    instrument   issued   or  nego- 
tiated when  overdue,  11). 
to  whom  must  be  given,  116. 
rules  governing,  115-135. 
must  be  given  to  indorser,  115. 
nuisrt  be  given  to  drawer,  115. 
need  not  be  given  to  guarantor,  115. 
by  whom  may  be  given,  115,  IIG. 
notice  by  stranger  not  sufficient,  116. 
party  discharged  cannot  give,  116. 
drawee  who  refuses  acceptance  cannot  give,  116. 
notice  by  agent,  116,  117. 
bank  as  agent  may  give,  117. 
to  whose  benefit  notice  enures,  117 
holder   required    to   give   notice   only    to   his   immediate 

indorser,  117. 
when  misdescription  does  not  vitiate,  118. 
when  notice  sufficient,  118. 
notice  need  not  be  signed,  118. 
omissfion  of  date  and  time  of  payment,  118. 
printed  notice,  119. 
signature  of  notary,  119. 
form  of  notice,  118-121. 
when  notice  defective,  118,  119. 
may  be  delivered  jjcrsonally,  118. 
may  be  sent  by  mail,  118,  120,  121. 
when  sufficiency  of  notice  question  of  law,  120. 
may  be  given  to  agent,  121. 
who  deemed  agent  to  receive,  121. 
where  party  dead,  121. 
to  partners,  122. 

to  joint  parties  not  partners,  122. 
to  bankrupt,  123. 
to  assignor  for  creditors,  123. 

may  be  given  as  soon  as  instrument  dishonored,  123. 
where  parties  reside  in  same  place,  123. 
where  parties  reside  in  different  places,  124,  125. 
when  notice  deemed  deposited  in  post-office,  125,  126. 
miscarriage  in  mails  does  not  impair  validity  of  notice, 
125. 


INDEX.  205 

(The  references  are  to  pages.) 
NOTICE  OF  DISHONOE  —  Confinwed 

time  in  which   indorser  to   give  notice  to  prior  parties, 

126. 
•where  notice  to  be  sent,  127-129. 
when  party  adds  address  to  signature,  127,  128. 
■where  party  has  not  given  address,  127,  128. 
■where  he  lives  in  one  place  and  has  office  in  another,  127. 
■where  he  is  sojourning  in  another  place,  127. 
■when  notice  actually  received  this  is  sufficient,  127,  129. 
waiver  of,  129. 

waiver  of  before  dishonor,  129,  130. 
waiver  of  after  dishonor,  129,  130. 
what  will  constitute  waiver,  129,  130. 
waiver  embodied  in  instrument,  130,  131. 
waiver  written  over  signature,  130. 
waiver  of  protest,  what   it   includes,  131. 
when  notice  dispensed  -with,  131-133. 

when  cannot  be  given  after  reasonable  diligence,  131,  132. 
•n-hat  will  constitute  reasonable  diligence,  132,  133. 
when  delay  excused,  133. 
reliance  upon  directory,  132. 
when  notice  need  not  be  given  to  drawer,  133. 
when  notice  need  not  be  given  to  indorser,  134. 
when  instrument  has  been  previously  dishonored  by  non- 
acceptance,  135. 
effect   of   omission   to   give  notice   of   dishonor   by   non- 
acceptance,  135. 
NOTICE  OF  EQUITIES,  what  constitutes,  68-71. 

See  "Promissory  Notk." 
NOTICE,  where  transferee  receives  notice  before  payment  in  full 

for  instrument,  67. 
NOTING,  263.  -l^vioJ^^ 

OMISSIONS,  what  omissions  do  not  affect  validity  or  negotiable 

character  of  iiistninicnt,  16,  17. 
OPTION,  to  pay  before  maturity,  13,  14. 

of  holder   to   require   something   in   lieu   of   payment   in 

money,  15,  16. 


206  INDEX. 

(Tho   rof»>n>ncos  arc   to   pages.) 
OKDER,  instrumont  mu.^  he  i)ayal)le  to,  or  bearer,  8,  19,  20. 

instniinents  payable  to,  8,  IS),  20. 

instrument  payable  to  order  of  drawer,  19. 

instrument  payable  to  order  of  maker,  19. 

instrument  payable  to  order  of  drawee,  19. 

instrument  payable  to  order  of  two  or  more  payees,  19. 

instrument  payable  to  order  of  one  of  several  payees,  19. 

instrument  payable  to  order  of  holder  of  office,  19. 

payee  must  be  named  or  indicated,  20. 
OVEEDUE    INSTRUMENT    is   as   regards   parties   issuing   or 
negotiating  payable  on  demand,  18. 

PARTNERS,  presentment  to,  105. 

PATENT  RIGHTS,  negotiable  instruments  given  for,  18,  182, 

183. 
PAYEES,  two  or  more,  19. 

one  of  several,  19. 

when  name  not  the  name  of  any  person,  19. 

acceptance  admits  existence  of,  82. 

when  payee  holder  in  due  course,  24,  64. 

acceptance  admits  capacity  to  indorse,  82. 

acceptance  does  not  admit  signature  of,  82. 
PAYMENT,  instrument  must  be  for  payment  in  money,  8. 

instrument  payable  in  merchandise,  8. 

option  to  require  something  in  lieu  of  payment  in  money, 
15. 

■what  constitutes  payment  in  due  course,  112,  113. 

by  principal  debtor,  136. 

by  party  accommodated,  136. 

by  party  secondarily  liable,  138. 

what  bills  must  be  protested  for  non-payment,  163. 

bill   protested   for  non-acceptance  may  be  protested   for 
non-payment,  16Y. 

of  bills  in  a  set,  174. 
PAYMENT  FOR  HONOR,  who  may  make,  171. 

how  made,  171. 

preference  of  parties  offering  to  pay  for  honor,  172.  ■ 

effect  on  subsequent  parties,  172. 

where  holder  refuses  to  receive  payment,  172. 

effect  of,  172. 

declaration  before  payment,  172. 

rights  of  payer  for  honor,  172. 


INDEX.  207 

(The  references  are  to   pages.) 
"PEDDLER'S  NOTES,"  consideration  required  to  be  stated  in, 

73,  74. 
PENCIL,  writing  may  be  in,  8. 
PERSON,  meaning  of  term,  4. 
PERSON  PRIMARILY  LIABLE,  who  is,  4. 

demand  of  payment  not  necessary  to  charge,  94. 

accommodation  maker  is,  140-142. 
PERSON  SECONDARILY  LIABLE,  who  is,  4. 

right  of  recourse  to,  109. 
PLACE,   failure   to   specify  place  where   drawn  does    not    affect 
negotiable  character,  16. 

presumption  as  to  place  of  indorgement,  58. 

of  presentment,  what  is  proper  place,  100-102. 

alteration  as  to  place,  147. 
PLEADING,  presentment  in  reasonable  time,  98. 

in  cases  of  alteration,  147. 
POST-DATED  INSTRUMENT,  negotiation  of,  22. 

instrument  not  invalid  because  post-dated,  22. 
POST-OFFICE,  what  constitutes  deposit  in,  12G. 

deposit  in  post-office  box,  126. 
PRE-EXISTING  DEBT  constitutes  value,  39-42. 
PRESENTATION,    instrument   payable    on    is    payable   on    de- 
mand, 26. 
PRESENTMENT  FOR  ACCEPTANCE,  in  what  cases  neces- 
sary, 159. 

•where  bill  payable  after  sight,  159. 

where  required  to  fix  maturity,  159. 

not  necessary  where  payable  at  day  certain   or  at  fixed 
time  after  date,  160. 

where  bill  expressly  stipulates  for,  159. 

where  bill  not  payable  at  drawee's  place  of  business  or 
residence,  159. 

when  drawer  and  indorsers  released,  160. 

duty  of  agent  to  present  bill  for  acceptance,  160. 

how  presentment  made,  160. 

must  be  by  or  on  behalf  nf  lioldcr,  160. 

must  be  at  reasonable  hour,  160. 

must  be  on  business  day,  160. 

before  bill  is  overdue,  160. 


208  INDEX, 

(Tlio   rofc>n'iu'('s  nrp   to   pnRos.) 

PRESENTMENT  FOR  ACCEPTANC^E  —  Conlinucd. 

mu^t  bo  to  drawee  or  some  person  authorized  to  act  foi 
hiin.  100, 

where  there  are  two  or  more  payees  not  partners,  160. 

where  drawee  is  dead,  IGO. 

where  drawee  is  bankrupt  or  insolvent,  IGO. 

on  what  days  may  be  made,  101. 

where  time  insufficient,  161. 

when  excused,  101. 

excused  where  drawee  dead,  161. 

excused  where  drawee  has  absconded,  161. 

excused  whore  drawee  is  fictitious  person,  161, 

excused  where  drawee  has  not  capacity  to  contract,  161. 

excused  when  cannot  be  made  after  reasonable  diligence, 
161. 
PRESENTMENT   FOR  PAYMENT,  of  instrument   issued  or 
negotiated  when  overdue,  19. 

necessary  in  order  to  charge  drawer  or  indorsers,  94. 

not  necessary  to  charge  party  primarily  liable,  94, 

where  instrument  payable  on  demand,  96-100, 

by  what  laws  determined,  96. 

what  constitutes  sufficient  presentment,  100,  101, 

must  be  made  on  day  of  maturity,  100. 

holder  has  entire  day  in  which  to  make,  100,  101, 

place  of  presentment,  101,  102. 

where  principal '  debtor  dead,  104, 

where  maker  or  acceptor  has  abandoned  place  of  busi- 
ness, 102, 

where  instrument  payable  at   bank,   103. 

collaterals    must   be   tendered   with    instrument,    103. 

instrument   must   be   exhibited,   103. 

what    will    excuse    exhibition,    103. 

where  persons  primarily  liable  are  partners,  105. 

to  joint  parties  who  are  not  partners,  10.5. 

when   not   required   to   charge   indorser,   106, 

when  not  required  to  charge  drawer,  106. 

when  delay  excused,  106,   107, 

waiver  of,  106,  107. 

what  will  amount  to  waiver,  106,  107. 

where  drawee   is   fictitious  person,   107. 


INDEX.  209 

(The  references  are  to  pages.) 
PRESENTMENT  FOR  PAYMENT  —  Continued. 

when  dispensed  with,  106,   107. 

computation  of  time,  111. 

instrument  falling  due  on   Sunday,  110. 

instrument  falling  due  on  holiday,  110. 

instrument  falling  due  on  Saturday,  110. 

not   necessary  where   bill   has  been   dishonored  by  non- 
acceptance,  162. 

how  made  to  acceptor  for  honor,  170. 

within  what  time  check  musrt  be  presented,  177,  178. 

effect  of  delay,  177,  178. 
PRINCIPAL  not  liable  unless  his  signature  appears  on  instru- 
ment, 32. 
PRINTED    PROVISIONS,    written    provisions    prevail    over, 

29,  30. 
"PROCURATION,"  signature  by,  34,  35. 
PROMISSORY  NOTE,  meaning  of  term,  4. 

note  given  for  purchase  price  of  goods,  11. 

payable  on  or  after  death  of  maker,  14. 

payable  in  gold  coin,  17. 

in  bank  bills,  17. 

in  New  York  State  bills,  18. 

in  Florida  funds,  18. 

in  specie,  18. 

given  for  patent  right,  18. 

"  Bohemian  oats  "  notes,  18. 

ambiguous  instrument  may  be  considered  bill  or  note,  29. 

non-negotiable  notes,  38. 

given  for  a  stallion,  74. 

given  for  lightning  rods,  74. 

peddler's  note,  74. 

usurious  notes,  74. 

given  for  gambling  debt,  72. 

when  bill  may  be  treated  as,  150. 
*  drawn  to  maker's  own  order,  175. 

dofinod,  175. 
PROTEST,  what  waiver  of  iiicludos,  131. 

construction   of  term,   131. 

construction  of  fcnii   in  jiloading,  131. 

may  be  made  in  case  of  dishonor  of  any  instrument.  135. 


2IO  INDEX. 

(Tlio   roforcncos  nvo   to   piiRos.) 
rilOTEST  —  Conlinucd. 

not  rcquircil  oxcepl  in  case  of  forci{j:ii  bills,  135. 
necessary  in  case  of  foreign  bills,  135,   163. 
unnecessary  unless  bill  appears  on  its  face  to  be  a  foreign 

bill,  103. 
how  made,  1G4,  165. 
must  be  annexed  to  bill,  164. 
must  be  under  hand  of  notary,  164. 
must  be  under  seal  of  notary,  164. 
when  to  be  made,  166. 

must  specify  time  and  place  of  presentment,  164. 
musrt  specify  fact  that  presentment  was  made,  164. 
cause   for   protesting   the  bill,   164. 
demand  made  and  answer  given,  164. 
manner  of  presentment,  164. 
may  be  made  by  notary  public,  166. 
may  be  made  by  resident,  166. 
presentment  must  be  by  notary  himself,  166. 
where  made,  166. 
when  dispensed  with,   167. 
for  better  security,  167. 

both    for   non-acceptance    and   non-pajnnent,    167. 
extending  protest,   166. 

before  maturity  where  acceptor  insolvent,  167. 
where  bill  is  lost,  167. 
of  bill  accepted  for  honor,  170. 

REASONABLE  DILIGENCE.    See  Due  Diligenxe. 
REASONABLE  HOUR,  what  is,  101. 
REASONABLE   TIME,  what  constitutes,   5. 

when  question  of  law,  5. 

when  question  of  fact,  5. 

in  case  of  instrument  payable  on  demand,  66. 

instrument  payable  on  demand  must  be  presented  within, 
96-100. 
REFEREE  IN  CASE  OF  NEED,  151. 
RENUNCIATION,   effect  of,  144. 

how  made,  144. 
REPEAL,  laws  repealed,  185. 

REPRESENTATIVE    CAPACITY,    person    indorsing   in    may 
negative   personal   liability,   57. 


INDEX.  211 

(The  xeferences  are  to  pages,) 
SATURDAY,  instrument  falling  due  on,  110. 
SEAL  does  not  affect  negotiable  character,  16^  17. 

of  corporation,  IT. 
SHORT  TITLE  of  negotiable  instruments  law,  2. 
SIGHT,  instrument  paj-able  at  sight  is  payable  on  demand,  18. 
SIGNATURE,  no  person  liable  whose  signature  does  not  appear 
on  the  instrument,  32. 

by  agent,  32. 

by  "  procuration,"  3-4. 

forged  signature,  35. 

acceptance    admits    genuineness    of    drawer's    signature, 
81. 
SPECIE,  note,  payable  in,  17. 
STALLIOXS,  notes  given  for,  74. 
STRIKING  OUT  IXDORSEMEXT,  effect  of,  59. 

when  may  be   done,   59. 
SUM  CERTAIN,  what  is,  9. 
SUNDAY,  when  day  for  doing  act  falls  on,  5. 

instrument  falling  due  on,  110. 
"SUNDRIES,"   instrument  payable  to,  22. 

TENDER,  ability  and  willingness  at  place  of  payment  equal  to, 

95. 
TER:MS,  when  sufficient,  22. 
TIME,  how  computed,  5,  111. 

when  statute  to  take  effect,  5,  185. 

of   indorsement,  57. 
TITLE,  short  title  of  act,  2. 

burden  of  proof  where  title  of  prior  party  defective,  77. 

whfii  defective,  67. 

warranty  of  where  negotiation  by  delivery,  87-89. 

warranty  of  where  negotiation  by  qualified  indorsement, 
87-89. 

warranty  of  by  general  indorser,  89-92. 
TRADE  NAME,  persons  signing  in,  32. 

UNCONDITIONAL  PROFUSE  OR  ORDER,  what  is.  10,  11. 

order  to  pay  out  of  particular  fund   is  not.    !<•,  11. 
USAGE,  regard  to  bo  had  to  in  determining  question  of  roason- 
ablo  time,  5. 


J 12  INDEX. 

(The  rofcronci's  an-  to  papis.) 
USURY,  no  implied  warranty  that  note  is  not  void  for  usury,  88. 
note  given  for  usurious  loan,  72,  73. 

VALUE,  meaning  of  term,  4. 

failure  to  specify  does  not  affect  negotiable  character  of 

instrument,    16. 
what  constitutes,  39,  40. 
pre-existing  debt  is,  39-43. 
what  constitutes  holder  for  value,  41. 
lien  on  instrument  constitutes,  41. 

"WAIVER  of  benefits  of  law  by  obligor,  15. 

of  presentment  for  payment,  107-109, 

what  will  amount  to  waiver  of  presentment  for  payment, 

108,    109. 
of  notice  of  dishonor,  129,  130. 
when  embodied  in  instrument,  130,  131. 
when  written  above  signature,  130,  131. 
of  protest,  what  it  includes,  131. 
WARRANTY,   where   negotiation   by    delivery,   87-89. 

where   negotiation   by   qualified   indorsement,    87-89. 

•of  genuineness,  87-89. 

■when  warranty  of  genuineness  not  implied,  88. 

of  capacity  of  prior  parties  where  negotiation  \y  delivery 

or  qualified  indorsement,  87,  88. 
no  implied  warranty  that  note  is  not  void  for  usury,  88. 
no  implied  warranty  of  capacity  to  contract  on  sale  of 

municipal  bonds,  8-7-89. 
general  indorser  warrants,  that  instrument  is  genuine,  89. 

that  instrument  is  what  it  pur- 
ports   to    be,    89. 
that  he  has  a  good  title,  89. 
that  prior  parties  had  capacity 

to  contract,   89. 
that   instrument   is  valid  and 
subsisting,    89. 
in  case  of  instrument  indorsed  "  for  collection  "  89,  90, 

"  WITHOUT  RECOURSE,"  effect  of  term,  53. 
WRITING  may  be  in  pencil,  8. 
WRITTEN,  what  included  in  term,  4. 
WRITTEN  PROVISIONS  prevail  over  printed,  29. 


l^  -^  I-awyt-rs    net-tied!       Weren't    the 

tiulky  cars  nnining  over  superfluous 
lawyers  every  day?    Diiln't  hurrying 
shysters   fairly   erowti   one   off    the  | 
sidewalks?    Was  tliere  a  single  busi- 
ness block  without  thetign  "Xotary  i 
l-'ublic    and    Counsellor    at     Law"?  ' 
Why,  tliere  are  twenty-slorv  build- 
ings down  near  Wall  "Street  as  full 
of  lawyers  as  a  warren  is  of  rabbits. 
More  lawyers!    I  put  these  things  in 
elegant    English;     but    she    puslied 
them  aside. 

"I  know  all  that,"  she  said;  "but 
they  aren't  in  our  field  at  all.  We've  a  new  sort  of  legal 
work  to  do:  not  to  straighten  out  tangles  after  tliey 
are  made,  but  to  prevent  things  getting  into  a  mess." 
"But  why  ilo  you  think  that  is  a  woman's  province?"  • 
"Because  to  make  things  nm  smooth  is  a  domestic 
problem.  We've  been  trained  to  it  for  generations,  and 
now  that  there  isn't  enough  housekeeping  in  the  world 
to  keep  us  all  busy  some  of  us  can  turn  our  domestic 
instincts  loose  on  law.  Oh,  I  wish  you'd  come  in  and 
help!" 

"But  I  don't  think  I  have  a  legal  mind,"  I  objected. 
"Vou  don't  need  one,"  she  cried. 
And  then  she  went  on  to  explain  that  woman's  in- 
hented  instincts  were  better  law  than  any  that  the 
schools  could  teach  her,  because  thev  sprang  from  ages 
of  experience  of  what  was  best  for  the  race,  and  though 
of  course  they  weren't  infallible  thev  were  as  nearly  so 
as  anytliing  we  had.  "What  we  need,"  she  concluded, 
"is  domestic  minded  lawyers." 

She  got  me  persuaded  to  the  extent  of  reading  a  book 
by  a  certain  Williston  about  some  things  called  "torts," 
and  mcidentally  brought  me  in  contact  with  a  group  of 
women  who  were  not  trying  to  play  man's  legal  game, 
but  had  put  on  a  new  game  of  their  own  in  the  old 
established  courts. 

T  FIRST  saw  this  new  game  in  process  when  one  day,  ' 
as  we  were  drinking  tea  in  the  firelight,  Mrs.  Mary 
Grace  Quackenbos,   whom  we  used  to  call  the  Lady 
Lawyer,  rushed  in  and  demanded:  , 

"Will  somebody  lend  me  a  cloak  and  hat?"  ' 

"What  for?"  asked  a  Literary  Light,   who,  having 
just  broken  into  our  Best  Magazines,  had  the  nerve  to  , 
ask  questions. 

"Because  I'm  going  to  the  Alabama  turpentine  pamps 
;onight,  and  this  little  black  bonnet  and  cloak  that  I 
■Iways  wear  might  give  me  away.     I  want  something  j 
nght  and  different,  something  to  make  me  look  less  I 
xe  a  deaconess." 
"Oh,  detective  work!"  I  cried.    "Who's  sending  you?" 
" Nobody's    sending    me.      Some    queer    cases    have 
turned  up,  and  some  very  strange  stories  about  the 
camps  down  there.     I  can't  get  the  facts  from  this  dis- 
tance;   so  I've  got  to  go." 

"How  about  your  practice?"  gasped  a  young  law>'er 
who  had  just  been  taken  in  on  probation  by  a  Wall 
Street  firm.  For  him  Law  had  an  awful  dignity.  He 
always  spoke  of  it  in  capitals.  The  star  to  which  his 
wagon  was  hitched  was  a  practice  of  his  own,  and  it 
(hra^ikfrljum  to  hear^Mrs.  Quackenbos  say  lightly: 

"Oh,  anybody  wfib  can  draw  a  bnel  can  take  care  of 
the  cases  I'm  leaving;  but  this  Alabama  business  is 
ditterent.  Alen  have  been  coming  into  my  office  with 
welts  and  whip  cuts  on  their  backs.  They  say  thev 
have  been  held  as  slaves  in  the  labor  camps,  chained 
and  beaten  and  robbed.  If  it's  true  that  hundreds  of 
men  are  being  held  in  peonage  down  there,  the  local 
lederal  attr>rney  has  got  to  know  about  it;  by  force,  if 
nccessar}'.  Nothing  can  b**  done,  up  here.  And  then 
It  s  ;ust  possible  that  there  isfl't  a  law  to  fit  their  par- 
ticular case,  anyway.  If  that's  so.  I  need  the  facts  to 
get  a  law  from  Congress  that  will." 

"Xow,  isn't  that  just  like  a  woman?"  howled  the  Cub 


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gorgeous  flower  trimmed  Win  which  sh^-T^^  """^^ 
aot  hke  a  deaconess.  And  bef orP  r?l  i  ^^^V'-^^-^ell. 
:ice  had  done  with  his  amazement  !  ^f'''^''''  ^  ^^^P^^"- 
ioor.  and  with  a  lauih  a^d^T,  -^l^  flammed  tiie  cab 
.It  was  so  like  heri-  o  Si  th?t  th.  .  ^^  V'  2°"^- 
nthin  her  countr^••s  eatS  wlrf  j,  """"""^^  °^  ^"yo"e 
he  whole  United  StatSi  th^'^^  t''  ^'^'"^^"1.-  to  treat 
lold,  and  she  a  caref,?l  t  ^"^.^  'I  ''  ''^  ^"st  a  house- 
.stice!-  '''''^'^  housewife  dispensing  domestic 

>wed  cloak  was  still  ckar  in  Z       P^^^""  ^nght  bor- 
^red  down  beside  mveaLbletL^.'"'^  ''^T  '^^  «"^- 

iore"th;  ?re^dl'nt  ^S  tjl^S^t?'-^'  ''''  '^^'^ 

rpentine  companf-  com^nllu-d  t^eonag  "";^^^^"^ 

otSonTfh"^-  '"'°''  ^^"^'••^'^  -?th"  San"for  ?he 
otection  of  the  immigrant  and  of  the  neoole  o/a  Jil 

■  ^S2.^t  .immigration,  frauds.     B.if  tr^rea?ly^gTe?t 


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Kegotiabltf 

Inttru«ent«  46 

Hays  V.  Hathbom  et  al 
74 N.   Y.     486  -  1878. 

Action  on  a  proniesory  note, 
i^poal   from  judgment   for  P. 

Tacto:       Note  nada  ty  Hathbom  and  Seuthgate  to  the 
orfer  of  F.  H,  Haihbom  ^ho  endorsed  It   In  blank.       On 
trial  P  proved  the  above  and  rested.       D  offer  to  prove 
that  P  vas  not   the  real  owner  of  the  note  or  party  in 
interest ,  that  proper  plaintiff  was  the  Saratoga  Co. 
Bank  to  whom  the  note  was  transferred  and  should  be  the 
P  in   this  action.        Evidence  was  excluded  as  iotnaterlal. 

Law;,       Ordinarily  it   is  no  defense  to  the  party  «u4d 
upon  coBrnRrcial  paper  to  show  that   the  transfer  under 
which  P  holds  it  is     without  consideration  or  subject 
to  equities  between  him  and  bin  assignor^   or  colorable 
and  merely  for  the  pur3)08e  of  collection^   or  to  secure 
a  debt  contracted  by  an  agent  without  sufficient 
authority.       It   le  sufficient  to  auke  the  P  the  real 
party  in  interest,    if  h^  have  the  legal  title  either 
by  written  transfer  or  delivery,  whatever  nay  be  the 
equities  between  himself  and  assizor.       But  to  be 
entitled  to  sue  he  must  now  have  the  ri^t  of  poseession 
and  ordinarily  be  the  legal  owner.       Such  ownership  may 
have  been  acquired  without  adequate  consideration  but 
it  must  be  sufficient  to  protect  the  D  upon  a  recovery 
against  him  from  a  subsequent  action  by  the  assign^or. 

The  production  of  the  note  by  P  was  prima  facie 
evidence  that   it  had  been  delivered  to  him  by  the  payee 
ani  that  he  had  title  to  it  but  the  D*s  offer  was  to 
rebut  this  presLmptton  and  should  have  been  received 
as  evidence. 

Decicion?       Judgment  reversed. 


I 


logotiabla 

Ingtnaienta       ^-y  4Y 

Hunter  r.   Allen  A  B&eoa 
127   A.    D.    572   -  1908. 

Aotion  on  promifisory  notot. 
Appeal  from  Judgnent  for  P. 

y&cts?       Allen,    of  the  firm  of    "I.N.E.   Allen  *  Co.", 
was   intereatsd  tn  a  luster  coapany  in  Korth  Carolina. 
The  Firat  National  Bank  of  Durham,   N.   C.  f^e  accuetoaed 
to  allow  this  lufflber  coajpany  to  oTordraw  ite  account 
and  to  draw  on  "I.N.E.AJ.lea  *  Co,"   of  lew  York  for  the 
overdue  araoimt.       lither  to  reeet  these  drafts  or  to 
fumieh  money  for  the  luirber  company,    the  D,   Allen, 
eent  these  notes  to  either  the  president  of  the  lumber 
company  or  the  bank's  cashier,   irhich  were  payable  to  j 

the  order  of  tha  luaiber  company,    signed  ■I.lf. E.Allen  St  Co? 
but  the    iate,    time  of  payment  and  aaaount  was  blank.      The 
cashier  filled  in  theee  blanks,   had  the  lunber  company 
endorse  the  notes  and  paid  the  notes.        On  maturity  they 
were  not  paii  and  were   endorsed  thereafter  to  P,    who 
elaiaa  bank,    and  therefore  he  was   a  bonci     fide  holder.         i 

Law:       The  bank  was  not  a  bona  fide  holder.       When  the 
cashif»r  received  the  notes  they  were  not  coaplsts  and 
could  only  be  made  so  by  filling  in  the  amount,    date 
and  tine  of  payment. 

Under  Sec.   91  Negotiable  Instrument  Law  and 
by  the  law  merchant,   one  who  buys  coamereial  paper 
which  renains  in  some  essential  particular  Jncomplete 
and  Imperfect  does  not  acquire  the  character  of   a  bona 
fide  bolder. 

Pecisi^nt       Jitd^ment  reversed. 


I       Ndgotiablo 

Ingtnip?nte  ,  50 

Havana  Cw^ral  R.R.  V.   Unickonbocher  Trust  Co. 
198     N.   Y,      422      -     19X0. 

Action  ^pon  throe  chscbi. 
Appsal   frOB   juiga^nt  for  P. 

Fac t8 :       P  opened  an  account  with  Central  Trust  Oo.  "by 
fhlch  ch>KkB   lirawn  upon  eaid  account  were  to  be  •IgTJed 
ae  followe:     "Havana  Central  Railroad  Co.   C.  W.  Van  Voort 
Traaaurer,"       P  treasurer  irew  three  checke  payable  to 
himaelf  and  signed  in  the  above  required  manner,    deroftitf 
thea  to  hifi  cvn  personal   account  and  tubsequently  dreir 
out   the  nion«%y.        D  presented  the  chocka  at  P'«  bank,    the 
Central  Trust  Co.,    w^ich  honored  the  clacks.       P  claimed 
its  trsfiBurer  hai  no  authority  to  draw  checks  payabls 
to  his   own  order;  that  it  was  not  enou^  that  D  ini|uirod 
at  P's  bank  and  wag  infonced  that   checks  w«9re  0.   K.   and 
that  D  sho^ild  have  inquired   frow  the  P  whsther  the 
checks  were  bona  fide.       D  claimed  it  acted  in  good 
faith  and  upon  P's  bank  acceptance  of   the  checks, 

La*^:       Wheti  a  corporation  op«ns  an  acco^mt  tith  a  bank  i1 
confers  on  it  the  power  to  deteriiine  ryheth^r  any  check 
drawn  upofi  the  account  confonns  to  to  the  contract  bs- 
twesn  the  depositor  and  depository.       Whan  it  makes  a 
2l stake  in  the  determination  of   such  a  question  the 
depository  nay  be  liable  to  the  depositor;  but  the 
depositor  cannot    recover  back  the  money  paid  on  such 
c^eck  to  a  tbird  person    'ho  has   received  it  in   j^ood  faitl 
relying  On  the  representation  of   the  deposit  hank  that 
the  deck  was  0,  K.   and  has  siAssquently  parted  with  the 
iBonay, 

The  distinguishing  feature  bet-zsen  this  case  and 
easss   re)  i*d  en  by  the  P  is  that    in  ths  latter's  cases 
the  fona  of   the  transaction  was  notice  to  the  party 
receiving  the  check  that    it   was  suu^t  to  he  used  to  pay 
an   individual   debt  out  of   trust  fimds.       Here,    on  thetr 
face,    checks  T»ore  not    designed  to  dischargs  any  obli- 
gation owing  to  the  D.       D  merely  collected  ths  amounts 
and  credited  them  to  credit  of  the  payee. 

Decision:       Judgaent  reversed. 

Compare  with  Case  49. 


T..rn»,  Dcr.inMAi  1 IBRARY  FACILITY  J 

^      otlable 
itruggnts 

^>r  51 

Havana  Cent.  R.Cq.   r.   Central  Truat  Co. of  H.  T 
204  Federal  Rerorta   546     -     191^. 

Action  for  breach  of   duty  in  paying  check.. 
Appeal   from  juigpient  in  favor  of  D. 

^^*y.  ^  ^•^-   l^'   ^'^^'    ^'  ^-  ^^  ^^«'*^»'    treasurer 
of  P     the  Havana  Central  R.   Co.,    opened  a  deposit  account 
in  it.  nan.  with  D,    Central  Truet  Co.       The  account  he- 
ca»6  active,   furthf^r  deposits  vera  lui^de  and  check,  were 
drmwn  upon  it  si^ed  "Havana  Cent.  R.  Co.,   C.W.Van  Voorhia, 
^\,  ^Among  the  checks  .o  drawn  and  signed  were  three 

*S!M^  ot*  *ll^'  ^^^^^^^  ^^  ^^•^^       '^••«  ch»cJf«  ''ere  for 
^26,461, 81;   $-^1,944.55  and  $15,000.,    respectively  and 
were  payable  to  W.  M.   Greenwood  or  C.  W.   Van  Voorhis 
They  vera  inloreed  by  .aid  Van  Voorhi.  and  not  by  said 
Oraenwoodj  were  depcited  in  th«  individual  account  of 
the  fomer  in  the  Knickerbocker  Trust  Cou^jany;  were  pre- 
•entad  by  that  Coapany  to  D  and  were  paid  by  It.       Said 
Van  Voorhi.  had  no   right  to  such  check,  and  his  act.   in 
drawing  them  aacunted   to  a  criminal    misappropriation   of 
funds.         The  action   was  based  uroa  an  allec»i   branch   ol 
duty  upon  the  part  of  D  in  paying  the  checks. 

Law!       One  i^o  receives  from  an  officer  of  a  corporation 
corporate  fund,   for  his  individual  u.e^    drawn  by  hin^.elf 
In  his  own  favor,    for  .uch  officer,  personal   debt.,    doe. 
.0  at  hi.  peril,   and   is  put  on  inquiry,   whether  such 
officer  had  authority  to  the  use  of   corporation's  property., 

A  bank   in  which   corporate   fimds    are  deposited  is 
not  a  trustee,    quasi  trustee,   factor,    or  agent  of   th. 
corporation,   but   debtor  only, 

D  was  not    charged  with  notice,    from  the  aiers  fact 
that  the  checks  wers  dravn  to  the  treasurer's  own  order; 
that  they  were  being  Improperly  used,    and  henc^  was  not 
liable  to  repay  the  aimount  to   the  corporation. 

Where  a  bank  has  knowledge  that  an  officer  of  a 
corporation  depositor  is  using  a  check  on  the  corporation^ 
fund,  for  his  personal  benefir,    e.    g.,    to  pay  his  own 
debt,    to  the  bank,    or  to  dep   sit   it   to  his  psrtional   credit, 
the  b  -nk   is  then  put  on   inquiry  and,    if   U  fails,    to  aakt 
it,    pays  at   its  peril,   not  because  it  is  agent  of  the 
corporation,  but  because  the  bank  cannot  discharge  its 

(over) 


dobtt  to   its  depositor,    except  on  the  depositor's 
authoriied  order. 

While  a  bank  in  ^ehich  a  corporation  *!as  a  de- 
posit account  is  charged  '>ith  notice  of   th'^  provisions 
of   corporation's  charter,   with  reference  to  authority 
of    its  officers,    it   is  not  charged  with  notice  of  by- 
law requiring  a  countor-signature  on  all  checks  drawn 
a^lnst   corporation. 

DeclgJon!       Judgment  affirmed. 


Ii.:^tniamitft      ,  ^  "52 

^' 

lard  V.   City  Tn.^?!t  Co.    laploaded 

Action  to  recover  amount   of  a  check. 
Coaplaint  disaietei. 

Facta:       Uiaatead  and  Klefsr  obtained  a  lean  of  $1?5,00?, 
from  tha  City  Trust  Co.   with  »»hich   they  purchased  all        fl 
the  stock  of  the  Hartaan  Uanufacturlng  Co.  and  deposited 
such  stock  with  the  Trust  Co.  as  security  for  the  loan 
and  as  collateral  for  their  promissory  nets  for  anount 
of  the  loan.       ?ub sequent ly  Unstoad  was  elected  president 
and  Klef'^r  secrete ry  and  treasurer  of   the  Hartnan  Co, 
Board   cf    directors  erapowered  Uitstead  to  slgjn  all   Its 
cl^ecks.     Lat'^r  Ur.stf^ad  and  Kiefer  Bisrapi^sented  to 
HanoTer  Bank  that   the  previous  loam  made  by  D  to  thea  was 
■ads  for  the  Hartman  Co.  and   influenced  Ranovar  Bank  to 
lend  the  Hartman  Co.    $20QC00,   to  bs  secured  by  the  stock 
held  "by  the  D,        To  pay  the  prcaaiesory  nots  owed  by 
Uretead  to  D,  Hanover  Brink  gwe  Ur;.stead  a  check  payable 
to  Hartman  Manufacturing  Co.    for  tl/'^5, 000.     Umstaad 
inicra^d  "the  note  by  «5gnlng  his  naras  as  president  and 
g^nara]    taanager  after  "Kartnian  iffg,    Co,"     D  took  the 
check  and  cancelled  the  note.       Qiiestion  «heth*»r  D  was  a 
holler  in   diie  course.       Rartroaa  ¥fg.  Co.  later  failed. 
D  Kade  no  inquiry  as  to  check. 

LrXL      "^'^  foraj  cf  the  ch-^ck  "Wts  notice  to  D  that  tJmstead 
•nas   using  ths  property   of  the  Kartrnan  Mfg.  Co.   to  pay 
his  personal  debt  and  effect  of  such  notice  wa«  to  put 
D  upon  Inquiry  to  see  'nrh ether  it  ifas  about  to  accept 
■oneyffron  one  to  ^om  it   did  not  belong  in  payment  of 
its  o-^  claia. 

Presumption  arising  froa  the  face  of  the  check 
was  that   it  belonged  to  Hartnan  Co.   and  that   its  president 
had  no  rig^t  to     use  it  to  pay  hie  personal   debts.     To 
rebut  such  presumption  the  D  should  have  made  due  in- 
quiry as  to  the  validity  of  the  check  and  if   reasonable 
Inquiry  would  hare  revealed  that   the  check  roally  bo- 
longed  to  Umstosd   or  that   it  was  being  used  by  him  in  a 
saanor  authorized  by  the  Hartoain  Co.   the  presunqpticm 
would  have  boon  overcono  and  D  would  havs  boon  protected. 

De:;ision:       Judpient  roverssd,     4  for;  3  agp.in«t. 


-1 


Magol 

In<tnCTi9nts  ^     ^^^^^  53 

L*  O 

BiBchaff  ▼,  Torlnrilla  Bank 
'  218     W.  Y.      106     -     1916. 


Appoal  from  ju^gpant   for  P. 

fttcta:  In  Uarch  1908  ono  Poggonl>urg  wa«  appointed 
executor  of  the  Mil  of  Josephine  F.  Schneider,  deceased. 
P,  here,  became  euccossor  in  Dec.  1914,  In  April 
Poggtnhurg  deposited  estate  funds  with  Bowerjr  Bank  In 
few  York  as  executor.  He  had  at  that  time  his  individ- 
ual funds  deposited  ith  the  D,  Yorkville  Bank.  In 
April  1  108,  Poggeaburg  by  mail^  sent  to  D  a  check  upon 
Bcvery  Bank  for  $500.  payi^le  to  order  of  D,  signed 
"Estate  of  Jos,  F.  fchneiier  by  H.  I,  Poggmburg,  Ex." 
D  received  check  in  due  course,  indorsed  and  transiiititted 
it  to  Bo'tery  Bank,  shich  pail  it  out  of  estate  (txnjst) 
funds.  D  placed  proceed  of  it  to  credit  -f  Poggenburg^^ 
in  his  individual  account.  Between  April  1908  and  9ov|H 
1911  D  received  29  si --liar  checks,  except  one  which  was  \ 
payable  to  Pog£;^mburg^  ^nd  by  hl«  indorsed,  payable  to  ^ 
the  ord^r  of  D.  Amount  of  checks  agfrregated  $14,005.  ' 
In  April  1908  D  o^rned  pronissory  note  of  goggenburg  for 
$1,750,  which  matured  June  3,  1908.  Poggonburg  p4id 
$765.  on  note  and  renewed  note  .for  a  thousand  dollars 
Slid  paid  it  when  it  becaae  due.  This  was  paid  f  roa  his 
Individnal  account.  Surrogate  Court  iecreed  Pogf^enburg 
was  liable  on  30  checks  drawn  fron:  Bowery  Bank  and  de- 
posited to  his  individual  account  In  Yorkville  Bank. 
Court  also  decreed  that  all  the  fnnia  so  withdrawn  were  ^ 
used  in  imywent  of  a  f oreraentloned  notes,  or  used  for  \ 
Poggenburg's  personal  purposes.  P,ms  allowed  to  — 
cover  the  e«  of  th^ne  funds,  less  $675.96  with  in 
and  costs. 


re- 

iterest 


Law:       A  fiduciary  may  lej^lly  deposit   the  trust  funis 
In  a  bank  to  his   Inrlivldual  account  and  credit.       Bank 
has  the  right  to  assurre  that  the  fiduciary  will  apply 
the  funds  to  tholr  proper  purposes  under  the  trust  and 
does  not  become  a  privy  to  a  mlsapproprUtion  by  ■erely 
paying  or  honoring  the  checks  of  a  dspositor  drawn  upon 
his    individual  account  in  which   th-re  are,    to  the  know- 
ledge of   the  bank  credits  created  by  deposit,  of   trust. 

fover) 


I 


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fund*.     But  Itt  patticipation  In  a  direrslon  of  such 
funis  aay  result  from  either  acqulrlnp;  an  advantag* 
or  benefit  directly  t>^rou^  or  from  divereion  or 
Joining  in  a  diversion  in  which  It  was  not  Interested, 
with  actual  notice  or  knowledge  that  the  diversion  was 
intenied  or  was  being  executed,   and  therabf  beco-^ing 

privy  to  it. 

Where  an  executor  depoilted  trust   funds  to  his 
individual  account  by  checks. upon  another  bank  which 
were  ei©ied  by  him  in  the  name  of  the  Mtate,   and 
afterward  paid  from  such   deposits  then  consisting 
wholly  of   trust  funds  a  personal    Indebtedness  to  the 
bank  of   deposit,    the  depository  is  not  only  liable  for 
the  diversion  of  the  sum  received  by  it,  but  is  charged 
by  the  law  to  take  the  reasonable  steps  or  action 
essential  to  keep   it  from  there  Jt'jr  paying  to  the 
executor  or  his  own  the  moneys  which  w^re  not  his  but 
were  trust  funds,   and  was  bound  by  the  information 
which  it  could  have  obtained   if  an  inqjuiry  on  its  part 
had  been    pushed  until  the  truth  had  been  ascertained, 
and  on  failure  to  do  so  will  be  held  liable  for  moneys 
eo  paid  out. 

Decision!       Judgment  modified  as  to  amount. 


■esotiftbl« 

Schle«lng^r,   as  Receiver  etc.   v,   Oilhooly 
189     W.   Y,     1     ~     1907. 

Action  OD  promissory  note. 
Appeal   from  judgiftent  for  P, 

^c^f  *       IJote  rriarie  by  D  payable  to  hie  ordar.     Conplalnt 
alleged  "before  aaturity  the  note  was  Indorsed  by  D  In 
blank  and  delivered  to  Wn.  tfulrhead  and  was  thereafter, 
prior  to  reaturlty,    discount*/*  by  said  bank  In  due  course 
aad   for  value."       The  bank,    discounting  the  not©  was 
a  federal  bank  -  "Federal  Bank  of  Vew  York".     Eridence 
showed  the  notes  were  usurious  aa  betwe<?n  D  and  tfulrhead. 
Question  whether  the  bank  co^ld  enforce  said  note. 

^awi      The  State  Law   originally  provided  that  a  usurious 
note  Was  void  and  could  not  be  recovered  upon  by  any 
holder. 

The  national  Banking  Act  then  provided  that   the 
national  bank»  are  subject   only  to  the   forfeiture  of 
intereet  only  on  aocount  of  usury  and  we  -  rseanias 
Congr'*ss  ••  nake  this   the  sole  rule   on  that  subject,    to 
the  exclusion  of  all  state  laws. 

The  Ptate  then  Inacted  a  law  {raking  the  state 
banks  subject  to  the  sane  forfeiture  as  the  national 
banks  were  subject  to. 

Proaissory  notes,    void   for  usury  as  b^^twesn  the 
origjnal  parties  are  nevertheless  valid  and  en  forcible 
when   discounted  by  '*  state  bank  for  value  before  maturity 
In  the  due  course  of  business,   without  notice  of  their 
usurious   Inception.  ^ 

Pulsion:       Judgpsnt  affirmed.       Two  justices  concur 
with  Vann  J.,  who  wrote  the  prevailing  opinion; 
Bartlett  J. concurs   in   result  on  gro  nd  thot  under  ?ec. 
96  negotiable  Instru»ent  Law  a  bona  fide  purchaser  takes 
a  note  free  from  defenss  of  usury;     Weoner  and  Hlecock, 
J.  J.   concur  with  Cullen  Ch.  J.  who  wrote  the  dissenting 
opinion. 


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UC  SOUTHFR';  REGION'fiL  L'PR'R^  FiC-lLITY 


AA    000  683  604    3 


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